Nomura Expects HK Economic Growth to Stabilize in 2002

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Last updated at: (Beijing Time) Saturday, December 01, 2001

Nomura Expects HK Economic Growth to Stabilize in 2002

Nomura expected Hong Kong's economic growth to stabilize in the second quarter of 2002 after the Hong Kong government released Friday the 0.3 percent drop in the GDP on a year-on-year basis in the third quarter of 2001.

"We expect the SAR (Special Administrative Region) economic growth to stabilize in 2002, when U.S. economy starts to be bottomed, China enters the WTO," according to Pu Yonghao, a senioranalyst with Nomura International (Hong Kong) Limited.

Nomura maintained its GDP forecast -0.2 percent for 2001, and 2.3 percent for 2002, having forecast a 1.2 percent decline for the third quarter of 2001, against a market expectation of 2.2 percent.

The SAR government announced Thursday it has revised the expected annual average growth rate for the economy this year to zero percent from one percent previously.

Pu expected a worsening near term outlook, quoting the weaknessin the export demand and depressed job market, which would drag down local demand, as the negative factors.

However, a strong Chinese economy, increasing cooperation between Hong Kong and China's mainland are a silver lining, according to Pu, seeing rising tourist spending from the mainland and demand for service related to China's accession into the WTO.

Nomura's forecast coincided with a response of the Hong Kong General Chamber of Commerce to the official release of the figure.

The chamber said although the current, final quarter of the year will show further weakness, the modest 0.3 percent decline inthe GDP in 2001, together with the slight upward revision of the second quarter number to 0.8 percent, should be regarded as relatively positive.

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