HONG KONG – Hong Kong’s finance chief predicted the southern Chinese financial city will have a modest economic recovery in 2013 as he Wednesday unveiled measures to boost growth and bolster employment in his latest budget.
Financial Secretary John Tsang said it will be a “challenging year” for Hong Kong, an Asian financial centre that is highly dependent on trade.
He cited factors including the “slow” economic recovery in the U.S., European economies mired in recession and uncertainty over the effectiveness of the Japanese government’s stimulus measures.
“The intricate external environment will remain unstable in the year ahead,” Tsang told lawmakers. “The whole world will have to face wars on three fronts, namely ‘currency’, ‘trade’ and ‘geopolitics.’ As a highly open and small economy, Hong Kong will be impacted by the development of these wars to a certain extent.”
Tsang forecast a “modest improvement” for Hong Kong’s economy in 2013 with growth between 1.5 per cent and 3.5 per cent, after it scraped out a 1.4 per cent expansion last year. Last year’s growth was the slowest since 2009 and well below the 10-year average of 4.5 per cent.
On a quarterly basis, growth rose to 2.5 per cent in the final three months of 2012, the fastest rate in a year.
Hong Kong is a former British colony that became a semiautonomous region of China 15 years ago. Its economy has flourished because of open markets and a busy port handling a big share of goods from China, but those factors also leave it highly vulnerable to the fluctuations of global trade.