HONG KONG FORECASTS FALL IN GROWTH TO 4.5%作者：Sundeep | 原始出处：ftchinese | 2007-3-2 09:57:12 | 已阅 2242 次

By Sundeep Tucker in Hong Kong
Thursday, March 01, 2007
 
Hong Kong's government yesterday said it expected economic growth to dip as low as 4.5 per cent this year as official figures showed the territory's gross domestic product grew by a better-than-expected 7 per cent in the final quarter of last year.

The surge in fourth quarter growth surprised economists, most of whom had predicted an increase of 6.5 per cent. Analysts said that the economy benefited from strong domestic consumption, helped by a booming stock market.

However, in its annual budget the government said it expected GDP to expand by 4.5-5.5 per cent this year, its lowest level since strong economic recovery following the Sars crisis in 2003.

The overall GDP growth of 6.8 per cent last year has swelled government coffers, allowing Henry Tang, financial secretary, to unveil a series of tax cuts ahead of the territory's leadership election.

Mr Tang said that Hong Kong would post a fiscal surplus of HK$55.1bn ($7.1bn) for 2006-07, nearly 20 per cent higher than expected.

The government is to use about a third of the surplus to fund a series of minor tax cuts aimed largely at Hong Kong's low and middle-income earners, including a populist move to halve the duty of wine and beer.

The government also forecast the consumer price index, the main measure of inflation, would rise by 1.5 per cent in 2007, compared with a 2 per cent rise last year.

Tai Hui, a Hong Kong-based economist at Standard Chartered, described the budget as “cautious”. He said: “There is uncertainty over where the economy might head over the next two years and there is an election coming up.”

But Christine Loh of Civic Exchange, a Hong Kong think-tank, denounced the budget. She said the territory was suffering because of the government's refusal to spend its fiscal surplus on additional investments in education, welfare and the environment.

Hong Kong's economy has been among Asia's best performers in recent years, growing by 7 per cent in both 2004 and 2005. That boosted tax revenues, enabling the government to erase large fiscal deficits sparked after the 1997-98 regional economic crisis.
 
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