HONG KONG GROWTH TO SLOW

HK growth pace to slow

Wednesday, October 07, 2015

The Hong Kong Institute of Economics and Business Strategy expects local economic growth to ease to 1.9 percent in the fourth quarter from a year earlier the slowest gain in the same period since 2012.
Real GDP in the third quarter is expected to have expanded 2.2 percent, higher than an estimate of 1.7 percent expansion made in July.
As the US economy continues to recover, demand for the greenback for trading is also rising. Due to the Hong Kong dollar's peg to the US dollar, which has been strengthening, the SAR's export performance is adversely affected. The institute, which operates under the University of Hong Kong, expects exports to have slumped 4 percent in the third quarter. It also forecasts exports to fall by another 4.5 percent in the last three months of the year.
Weakness in the mainland economy has also held back Hong Kong economic growth. The institute expects GDP growth to rely on local demand in the second half.The volume of retail sales in August fell 0.2 percent from a year earlier. The institute expects the retail sales downtrend to continue, due mainly to tourists reining in their spending and other adverse factors.
Meanwhile, Markit said Hong Kong's purchasing managers' index in September rose to 45.7 from the six-year low of 44.4 in August. But it remains below 50, indicating prospects of further deterioration in the local private sector. KATE LIN