WASHINGTON, Dec. 11 (Xinhua) -- The GDP growth rate of China's Hong Kong Special Administrative Region (SAR) is expected to pick up pace to around 3 percent next year as the drag from exports abates, according to a latest forecast of the International Monetary Fund (IMF).
Global economic weakness is impacting the region's economic growth, and the slowdown is being driven by trade developments, the global lender said Tuesday in a statement highlighting the preliminary conclusions made from its 2012 Article IV consultations with Hong Kong.
"Unemployment is expected to remain low, especially in the low-skilled segment, reflecting buoyant activity in tourism-related sectors and construction," it said in its annual checkup of the economic and financial conditions of Hong Kong.
In line with the cooling economy, consumer price pressures have eased, which has been helped by declining food inflation pressure. But housing prices have increased 20 percent so far this year and are now double the trough of 2008, the statement added.
"The sharp run-up in house prices raises the risk of an abrupt correction. In past episodes, the banking system has proven resilient to a substantial downswing in real estate prices. Nevertheless, the property sector represents half of outstanding loans for use in Hong Kong SAR, with additional risks coming from the use of real estate as collateral."
The IMF also said policies on a number of fronts are needed to contain macroeconomic and financial risks from the housing market. Given the economic outlook, next year's budget should continue to be tilted toward supporting growth.
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