Hong Kong’s full-year GDP could grow by 6.9 percent, higher than many analysts had expected, as robust exports and improving consumer demand firmly support its economic recovery, Standard Chartered said on Friday.
The city’s unemployment rate dropped for three consecutive months after hitting a 17-year high early this year, with the sectors that had been hit the most by the coronavirus pandemic showing a strong rebound. Standard Chartered senior economist Kelvin Lau said he believes the unemployment rate will further decline in the second half of the year, creating more domestic demand that will boost economic growth.
Meanwhile, the bank also raised its forecast for the Chinese mainland’s full-year economic growth from 8 percent to 8.8 percent
Better controlling the pandemic with a rising vaccination rate and the relaxation of social-distancing rules will also help to unleash local demand, he said.
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Hong Kong’s economy expanded 7.9 percent year-on-year in the first quarter.
The special administrative region could continue to benefit from the loose monetary policy globally in the second quarter, with international capital inflow promoting the recovery of its real estate market, Lau said.
The incoming adjustment of the reserve requirement ratio (RRR) will also provide a sound economic environment for Hong Kong, he said.
“We forecast that People’s Bank of China possibly will further lower 50 base points (for the RRR) in the fourth quarter, which would largely support the demand,” said Ding Shuang, Standard Chartered’s chief economist for Greater China and North Asia.
Meanwhile, the bank also raised its forecast for the Chinese mainland’s full-year economic growth from 8 percent to 8.8 percent.
“The Chinese mainland will step up support for small and medium-sized enterprises and green development through lower-cost bank lending and other measures in the second half of the year,” said Becky Liu, Standard Chartered’s head of China macro strategy.
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