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Hong Kong economy heated up in first quarter |
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News |
May 27, 2000
HONG KONG, MAY 26 (AP) - The economy grew by 14.3 percent in the first quarter, gaining even more momentum than private forecasters had predicted, according to government figures released Friday.
Government economist K.Y. Tang said the "spectacular preformance" from January to March, when compared to the same period a year earlier, had prompted the government to increase its prediction for the full year's growth to 6 percent from an earlier forecast of 5 percent.
Private economists had predicted third quarter GDP growth of around 11 percent.
Hong Kong benefited from more external trade, as well as higher consumption and investment, Tang said. The result was a further acceleration of the territory's economic growth, which had stood at 9.2 percent during the three months ending Dec. 31.
There also were fewer people out of work, with an unemployment rate of 5.5 percent in the most recent quarter, compared with 6.0 percent late last year, Tang said.
Tang warned that Hong Kong's economy faces risks if the U.S. economy slows. U.S. interest rate increases "with likely ensuring repercussions on the rest of the world" pose another danger.
Hong Kong recently raised rates a half point to match the most recent increase from the U.S. Federal Reserve - it was a necessary move to maintain the fixed link between the Hong Kong dollar and the U.S. dollar - although some experts warn this could harm the recovery.
Even though Hong Kong emerged last year from a deep recession, it has been suffering deflation for the past 18 months.
Tang predicted Friday the deflation will ease and could give way to modest price increases by the end of the year.
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