HK economy to recover gradually for rest of 2009: CE

16:17, October 14, 2009      

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Hong Kong Special Administrative Region (HKSAR) Chief Executive Donald Tsang said on Wednesday Hong Kong's economy has benefited from the Chinese mainland economy's growth momentum amid the economic downturn and will gradually recover for the rest of the year.

"I am confident that, for the rest of the year, our economy will improve further and gradually recover," he said while delivering an annual policy address at the Legislative Council.

In the address broadcast live, Tsang concentrated on Hong Kong's plans to tackle the current economic challenges.

He noted that the hard-hit Hong Kong economy recorded a sharp year-on-year decline of 7.8 percent in the first quarter, yet Hong Kong people have done a great job in the past extraordinary year "in keeping the ship afloat during this economic storm of the century" that swept the entire world.

The Chinese mainland and Asian economies have been improving at a pace faster than those in Europe and the United States.

"In particular, the Chinese mainland economy quickly regained its growth momentum in the second quarter after forceful stimulus measures by the Chinese mainland authorities. Hong Kong's economy also benefited," he said, adding that the local economy grew by 3.3 percent in the second quarter compared with the first quarter, reversing the contraction over the preceding four quarters.

The HKSAR government launched a series of measures in stabilizing the financial system, supporting enterprises and preserving employment.

The Hong Kong Monetary Authority introduced a full deposit protection scheme. As a result, interbank rates fell significantly. The loan guarantee schemes launched by the local government last year stabilized over 10,000 enterprises and secured more than 240,000 jobs.

The HKSAR government's relief measures since last year have amounted to 87.6 billion HK dollars, equivalent to 5.2 percent of HK's GDP, higher than the average for the G-20 economies. The stimulus packages taken together, which would raise this year's GDP by roughly two percentage points, have abated the rise in unemployment.

As an Asian business hub, Hong Kong has attracted an influx of foreign capital, boosting Hong Kong's real estate and securities markets, he added.

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