ADB Growth Forecast For SAR More Than Twice Government Estimates

by Mary Swire, Tax-News.com, Hong Kong

11 April 2002

The Asian Development Bank (ADB) has forecast economic growth for Hong Kong of around 2.1% this year - more than double government estimates.

In its Asian Development Outlook 2002, released on Tuesday, the ADB also predicted SAR growth of 4.8% next year. However, although the bank has adopted a more optimistic outlook than the government on Hong Kong's economic future, the figures are still low compared with growth estimates for other countries in the region.

This, according to the ADB, is because the size of the jurisdiction's budget deficit will reduce the scope for the introduction of fiscal stimulus measures over the coming years. 'It's still a low growth rate,' Jean Pierre Verbiest, the ADB's Assistant Chief Economist admitted to the South China Morning Post on Wednesday, before revealing that Singapore and Korea are set to grow by 3.7% and 4.8% respectively this year.

Meanwhile, the prospects for growth and development in the Chinese economy look good, and the new WTO member is forecast to grow by 7% this year, and 7.4% in 2003.

The annual publication stated: 'A gradual recovery in global trade and a moderate improvement in capital flows to the region should provide a stimulus to all subregions of developing Asia,' and explained that a strengthening US economy pulling out of a milder than predicted recession is proving beneficial to the outlook for almost all the world's economies.

However, the ADB Development Outlook report warned that rising oil prices or an expansion in the US war on terrorism could adversely affect the Asian region's economic growth prospects.

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