Wednesday, October 8, 2014



HKU forecasts slower growth

Thursday, October 09, 2014

The University of Hong Kong yesterday downgraded its forecast for the SAR's economic growth this year, citing economic woes in the mainland and the US amid widespread expectations of interest rate hikes.

Hong Kong's gross domestic product is now expected to grow by 2.2 percent in 2014 from the previous forecast of 3.4 percent, the university's Institute of Economics and Business Strategy said. Ongoing pro-democracy protests are likely to hurt local consumption, tourism and foreign investment if they are prolonged, the institute warned. If they last for a month, retail sales and tourist numbers may slide by 10 percent, said Wong Ka- fu, principal lecturer of economics at HKU.

Economic growth could be reduced by 0.4 percentage points, along with personal consumption falling 0.1 percentage point and jobless numbers rising 0.1 percentage point,Wong said. But he noted the SAR remained an attractive destination for foreign capital thanks to its healthy legal system and local businesses being flexible to change. The institute expects Hong Kong to grow by 2.1 percent in the fourth quarter after the local economy expanded by 2.4 percent in the July-September period. Retail sales are seen slipping 2 percent in the fourth quarter due to lower spending by visitors and weaker local demand. Private consumption is projected to grow by 1.7 percent in the October to December period. JENNIFER LI