HK Economy to Recover in 2nd Half-year: Bank of China

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Last updated at: (Beijing Time) Sunday, July 07, 2002

HK Economy to Recover in 2nd Half-year: Bank of China

Despite mixed signals in Hong Kong's economy, gradual and moderate economic recovery can be anticipated, the Bank of China Hong Kong Limited said yesterday.

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Despite mixed signals in Hong Kong's economy, gradual and moderate economic recovery can be anticipated, the Bank of China Hong Kong Limited said yesterday.

In the recent issue of Economic Review published by the bank's economic research division, the Hong Kong economy is reported to have already shown initial signs of bottoming out in the first quarter.

Improvement was demonstrated by the slowing GDP decline. Real GDP for the first quarter was down 0.9 percent year-on-year, whichwas less than the 1.4 percent decline in the fourth quarter of last year, the report said.

Had it not been for contributions from the Chinese mainland factor, which pushed up Hong Kong's GDP by 1.5 percentage points in terms of merchandise and services trade in the first quarter, Hong Kong's GDP would have declined by 2.4 percent, it said.

The mainland factor is attributable to the Central People's Government's effort to expand domestic demand and encourage exportto sustain rapid growth on China's mainland, and also due to the 7.6 percent of GDP growth achieved on the mainland in the first quarter, it said.

In the second half-year, Hong Kong's economic recovery is due mainly to the major reason that the external economic environment will continue to improve, particularly the softening US dollar exchange rate will favor Hong Kong's exports, the report said.

The adoption of the principal official accountability system bythe Hong Kong Special Administrative Region government should alsoenhance administrative efficiency, fostering economic restructuring, it said.

Finance, logistics, tourism and business support services will become new development spots.

The report hinted that Hong Kong will continue to benefit from such a Chinese mainland factor in the time to come.

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