IMF forecasts HK's growth over 4 percent for 2004

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Last updated at: (Beijing Time) Wednesday, December 24, 2003

IMF forecasts HK's growth over 4 percent for 2004

The International Monetary Fund (IMF) projected Hong Kong's real gross domestic product growth at around 4.5 percent to 5 percent for 2004 following an estimated growth of 3 percent for 2003.

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The International Monetary Fund (IMF) projected Hong Kong's real gross domestic product growth at around 4.5 percent to 5 percent for 2004 following an estimated growth of 3 percent for 2003.

According to Tuesday's government press, the IMF said that the strong economic recovery is supported by surging inbound tourist arrivals -- foremost from China's mainland -- a strengthening global economy, the advent of the Mainland and Hong Kong Closer Economic Partnership Arrangement and the allied improvement in domestic consumer sentiment.

The IMF expected an easing of Hong Kong's deflationary pressures in the near term. It projected consumer price deflation to ease to 1 percent by end-2004 and cease to exist by mid-2005 inHong Kong.

This assessment was made by the IMF mission in its concluding remarks released during its visit to Hong Kong from Dec. 11 to 15 for an interim review of Hong Kong's macroeconomic policies, including fiscal and exchange rate issues under the annual ArticleIV Consultation process.

On the fiscal side, the IMF recognized that despite difficult economic conditions, significant progress has been made this year in enacting a number of revenue and expenditure measures.

However, the IMF felt that the Hong Kong Special AdministrativeRegion (SAR) government should leverage on the improvements in macroeconomic prospects to make demonstrable headway toward fiscalconsolidation.

It recommended a further reduction of the operating deficit by about 1 percent of GDP in financial year 2004-05 in Hong Kong.

The Hong Kong SAR government's Acting Financial Secretary Frederick Ma said Tuesday, "We welcome the IMF's recognition of the significant effort and progress made by the government so far towards restoring fiscal balance. We are committed to achieving fiscal balance by 2008-09."

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