Hong Kong economy may have expanded in second quarter

Discussion in 'Economics' started by ASusilovic, Jul 5, 2009.

  1. HONG KONG (MarketWatch) -- Hong Kong's economy may have begun to grow in the second quarter and could be on track for a better performance in 2009 than the government had forecast earlier, officials said Monday.

    Financial Secretary John Tsang was cited in news reports as saying there were signs the economy had begun to pick up steam after a record slump in the first three months of the year.

    "We see some encouraging signs in the economy," Tsang was cited by Dow Jones Newswires as saying in an address to Hong Kong legislators.

    The city's finance chief said signs of stabilizing external demand for exports were a key driver in contributing to the bottom line.

    Hong Kong's economy contracted a record 4.3% in the first quarter of this year from the fourth quarter of 2008.

    Separately, the city's chief economist Helen Chan told legislators the economy will shrink less than the government's earlier forecast of a 5.5% to 6.5% contraction.

    "The current forecast doesn't take account of the government's stimulus measures, which already have had some positive effect on the economy," she said.

    The city's jobless rate hit a three-year high of 5.3% and is expected to keep rising.

    Chan added the government would release revised growth forecasts in mid-August.

    Hong Kong has pledged stimulus spending of 87.6 billion Hong Kong dollars ($11.3 billion) in the current fiscal year ending March 2010, which is expected to lift growth by two percentage points.