Hong Kong to see higher growth amid signs of recovery

  • 27 February 2013
  • From the section Business
Media captionRich poor divide in Hong Kong

Hong Kong's government said it will look to boost growth and employment after the territory expanded at its slowest pace since 2009.

Financial Secretary, John Tsang, unveiled relief measures as part of his budget proposal for the 2013-2014 year.

He added that he expects the economy to grow by 1.5% to 3.5% in 2013.

Hong Kong, and the rest of Asia, saw global demand fall during Europe's debt crisis, although there have recently been some signs of recovery.

Hong Kong saw growth slow to 1.4% in 2012 compared to the previous year, lower than the average over the past 10 years according to Mr Tsang.

He warned of risk factors in the global economy that could weigh on Hong Kong's open economy including a trade slowdown and possible currency war.

"The intricate external environment will remain unstable in the year ahead," he said.

Property prices

The budget offered a variety of measures to help the poor and elderly, as well as for small businesses.

Image caption Hong Kong saw slower than average growth over the past 10 years, according to Mr Tsang

However, he offered no major new moves to bring down soaring property prices, something that Hong Kong residents have long complained about.

Mr Tsang promised only to continue trying to boost the supply of land and find potential new areas for land reclamation.

The city, and others in Asia, have seen property prices rise partly because of money flowing in from countries where monetary policy is being loosened.

Last week the government announced measures to cool property prices including higher stamp duties because of concerns that an asset bubble is being created.

'Modest growth'

There have been some signs that the overall economy is improving in recent months, however.

The city saw growth of 2.5% in the three months to December from a year earlier, data showed. That is up from 1.4% in the third quarter.

Mr Tsang said that his package of measures will stimulate the economy by 1.3 percentage points, but did not provide details.

He added that the government will look to grow its logistics and fund-management industries to support long-term economic growth.

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