IMF raises growth forecasts for Hong Kong economy

HONG KONG, Nov. 3 (Xinhua) -- The International Monetary Fund (IMF) on Tuesday released its latest growth forecasts for Hong Kong economy, projecting a contraction of 2 percent in 2009, followed by a growth of 5 percent in 2010.

The assessment released Tuesday was made by an IMF mission to Hong Kong following consultation discussions with local officials and businessmen, the Information Services Department of the Hong Kong Special Administrative Region (HKSAR) government said.

"While 2009 has been a difficult year, recent monthly indicators have been quite positive," the IMF mission said in a report on the preliminary conclusions.

A report released in October by the IMF has projected a contraction of 3.6 percent in 2009 and a growth of 3.5 percent in 2010. In another report released by the IMF in May on the regional economic outlook, a contraction of 4.5 percent was projected for Hong Kong in 2009, followed by a modest growth of 0.5 percent in 2010.

The IMF mission on Tuesday also said they expected unemployment to decline in the coming months and inflation pressure to remain little.

"Price pressures should remain muted and, given our current outlook for global commodity prices, consumer price inflation should end 2010 close to zero," said the report released on the website of the International Monetary Fund.

The IMF mission welcomed the proactive and concerted policy efforts by the HKSAR government to tackle the global financial crisis.

Hong Kong's banking system has proved to be resilient over the past year, and it remains healthy, liquid and well capitalized, it added.

The mission cautioned that the world economy was still fragile and that the global economic recovery was likely to be drawn-out and subject to downside risks, adding that the Chinese mainland growth was gathering strength.

The protracted process of recovery in the main industrial economies is likely to mean that the contribution to Hong Kong's economic growth from external demand should remain relatively weak for some time, it said.