HK economy to recover by mid-2009: Analysts
Updated: 2008-11-14 07:39
By Lillian Liu(HK Edition)
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Hong Kong's economy will see signs of recovery by the middle of 2009 if the global market improved somewhat and the SAR government unveiled timely and effective rescue measures, economists at Standard Chartered Bank (SCB) said.
"Hong Kong economy would rely on the mainland and if the mainland maintains an 8 to 9 percent growth and launches favorable monetary policies, that would be very helpful for the city," said Nicholas Kwan, head of Asia research at SCB, at a press conference yesterday.
The world economy will regain strength around late next year or early 2010. "This is our fairly optimistic forecast as the financial tsunami has only passed the first stage," Kwan said.
The British bank predicts Hong Kong's economic growth will continue its slowdown with a modest 1.2 percent growth in the fourth quarter this year, while the 2008 growth should see a 3.7 percent increase.
"The economy will drop significantly; an annual growth of 7 percent has become history. However, it won't slide below zero either, so the fourth quarter growth would be around 1.2 percent," said Kelvin Lau, an economist at the bank.
The SCB thinks the worst time is not yet over as the latest signs of US consumers tightening their spending just prevailed. The bank added that the financial tsunami has entered the second stage in which a flood of small- and medium-sized enterprises (SMEs) wouldn't be able to weather the hard times and close their business.
"The Hong Kong government has done enough to assure SMEs and investors, but the government can only afford to help a number of companies while more entrepreneurs look for help. The SAR government can only be selective," Kwan said.
The third stage, Kwan explained, is the recovering phase. "Those who will withstand the tsunami will only become stronger and more consolidated," Kwan added.
The lender, with its strength deployed mainly in emerging markets including Asia, the Middle East and Africa, believes the world is now expecting a lot from China, a potential pillar for the world economy.
At the G20 summit in Washington this weekend, Chinese leaders will hog the limelight, Kwan said.
However, the biggest contributor to global growth also showed signs of slowdown. China's industrial output grew at a slower-than-expected pace, with production rising 8.2 percent from a year earlier, the smallest gain in the last seven years, the Sate Statistics Bureau said yesterday.
(HK Edition 11/14/2008 page2)