IMF forecasts six percent growth of HK economy

The International Monetary Fund ( IMF) Staff Mission has expected Hong Kong's economy to grow between 5.5 percent and 6 percent this year, and about 5 percent in 2007 and over the medium term.

The main near-term risks are a sharper slowdown in global demand, particularly in the U.S., and a rise in protectionist sentiment against the Chinese mainland, the mission was quoted as saying by a government press release from the Hong Kong Special Administrative Region (HKSAR).

Over the medium term, growth prospects will depend on how well the evolving financial integration with the Mainland is managed and expanded, and competitive pressures from other regional financial centers withstood, according to the mission.

This assessment was made by the IMF mission in its concluding statement at the end of a visit to Hong Kong for the annual Article IV Consultation, which involves a review of Hong Kong's macroeconomics policies, including fiscal and exchange rate issues.

Welcoming the HKSAR government's efforts in further strengthening market infrastructure and promoting financial integration with the Mainland, the mission endorsed the general policy framework of the HKSAR government, including its fiscal and exchange rate systems.

Henry Tang, financial secretary of HKSAR government, said the mission's positive assessment on the robust market infrastructure of Hong Kong was welcome.

"Efficient and well-regulated financial intermediation is crucial to the competitiveness of an international financial center. We will strive to maintain Hong Kong's success on this front," he said.

The mission said financial integration with the Mainland will be a major driver of Hong Kong's competitiveness.

HKSAR Monetary Authority Chief Executive Joseph Yam shared the mission's view. He said further financial integration with the Mainland is important to the maintenance of Hong Kong as an international financial center.

"The key to this will be our ability to make it possible for Hong Kong's financial platform to play a role in meeting the needs of financial liberalization on the Mainland and in channeling Mainland savings into Mainland investments," he said.

Source: Xinhua