HK Expects 6% Annual Economic Growth

Zeng Yinquan, chief secretary of the treasury department of Hong Kong SAR, predicted that Hong Kong's economic growth would come to 6 percent this year. He made the prediction at the Financial Affairs Committee of the Legislative Council of Hong Kong SAR.

He pointed out that Hong Kong's economy is recovering at an ideal pace. In the first quarter, the economic growth reached 14.3 percent, external trade was remarkable, and exports to the United Stated and the EU saw a two-digit increase.

With regard to consumption, both retail and wholesale volumes increased somewhat. Compared with the same period of last year, private consumption in the first quarter increased by 8.3 percent. In addition to rise in internal demand, increase in the number of visitors to Hong Kong also boosted the consumption growth. According to the statistics from Hong Kong Tourism Association, the number of tourists to Hong Kong increased by 13 percent in the first three months of this year. The increase in the whole year is estimated to be 6.8 percent. The number of tourists is likely to break the record of 1996.

Another sign of economic recovery is the decline of the unemployment rate. Zeng said that in the past several years, because the increase rate of labor population exceeded that of employment population, so the rate of unemployment of Hong Kong continues to stand at a high level of over 5 percent at present. However, since the fourth quarter of last year, the situation has been gradually improved. For instance, in the first quarter of this year, the total number of the employed increased 3.6 percent while the increase rate of labor population was 2.8 percent, demonstrating a gradual decline in the unemployment rate.

He emphasized that it is a conservative yet pragmatic estimation to raise the economic growth to 6 percent.

Zeng pointed out that the housing supply has surged to a peak in recent years, which has resulted in a market imbalance. This, plus the financial crisis, has scared the people, dealing a heavy blow to citizens' house-buying desire. However, the contradiction between demand and supply is only temporary. If the economic growth reaches the anticipated 6 percent this year, people will restore their confidence in the housing market and the government will not interfere in it.



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