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HK's GDP to Grow by 6.8% in 2000, PECC Official
Hong Kong is expected to have a real GDP growth of 6.8 percent this year, marking the end of a rare deflationary cycle in the region's history, an official of Pacific Economic Cooperation Council (PECC said in Hong Kong on Tuesday.
Delivering a PECC report on Pacific economic outlook forecast at a press conference Tuesday, George Leung, member of the Hong Kong Committee for Pacific Economic Cooperation, said that the forecast of PECC also showed a slower growth in 2001 with the real GDP growth of 4.7 percent due to the interest rate hikes in 2000 and higher base for comparison.
PECC attributed Hong Kong's high growth rate in 2000 to picking up of domestic demand, strong growth of external trade and the revival of domestic consumption spurred by better employment prospects.
Leung, also chief economist of the Hong Kong HSBC Corporation Ltd., said broad-based recovery will be seen in 2000 as domestic demand picks up and external maintains its strong growth momentum.
Leung said that 2000 should mark the end of a rare deflationary cycle in Hong Kong's economic history, with deflation forecast to lessen to 2.2 percent due to reviving domestic demand.
"One development that could affect Hong Kong's economic prospects for 2000-2001 is a more aggressive tightening of US monetary policy, as Hong Kong is forced to follow the US actions by the present fixed exchange rate arrangement," Leung cautioned.
And a significant slowdown in the US economy would also have an adverse impact on Hong Kong's export growth, he added.
From 2001 on, Leung concluded, the effects of the East Asian crisis will finally dissipate and economy will revert to its normal growth cycle, with the effects of China's accession to the WTO taking over as the prime factor in determining domestic growth.
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