HK GDP expects to grow 5.1 pct in 3rd quarter

The APEC Study Center of the University of Hong Kong released Tuesday its quarterly Hong Kong Macroeconomic Forecast that real GDP growth in the third quarter of 2006 is estimated to be 5.1 percent on a year-on-year basis.

According to the center, the growth estimate is a downward revision of the 5.9 percent forecast released on July 6, 2006, due to the weakening in fixed capital formation.

In the fourth quarter of 2006, real GDP growth is forecast to moderate to 4.5 percent when compared with the same period last year.

Professor Richard Wong Yue-Chim, director of the center said that, "Hong Kong's economy is expected to grow with real GDP growing by 4.8 percent in the second half of this year, dropping from the 6.6 percent growth in the first half. For the year as a whole, real GDP is likely to grow by 5.7 percent."

"Despite a weaker external environment, Hong Kong real GDP is forecast to grow by 5.7 percent in the current year. The growth is broadly-based and is primarily driven by a further strengthening in domestic demand which is estimated to contribute 3.9 percentage point to the overall growth." Wong said.

After three consecutive years of above trend growth, the Hong Kong economy is expected to revert to its trend growth path in next year, growing by around 4.5 percent, and inflation rate is forecast to pick up to 2.5 percent to 3.0 percent, said Wong.

"The labor market will improve slowly. The unemployment rate is expected to drop slightly to 4.7 percent in the fourth quarter. Rising import prices and rents will continue to pull up consumer prices. Inflation rate is forecast to increase to 2.6 percent in the fourth quarter," according to Dr. Alan Siu, executive director of the center.

Source: Xinhua