This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious




IMF Predicts Sustained Economic Growth For Hong Kong

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

08 November 2006

The International Monetary Fund expects Hong Kong's economy to grow by 6% this year and maintain growth of 5% in 2007 and into the medium term.

In its concluding statement at the end of a visit to Hong Kong for the annual Article IV Consultation, the IMF stated that growth prospects will depend on how well the evolving financial integration with the Mainland is managed and expanded, and competitive pressures from other regional financial centres withstood.

According to the mission, the main risks to the Hong Kong economy are posed by a possible global economic downturn, particularly in the United States, and a rise in protectionist sentiment against the Mainland.

However, the government's efforts to strengthen market infrastructure and promote financial integration with the Mainland were praised by the IMF, as was the general policy framework of the government, including its fiscal and exchange rate systems.

The mission said that financial integration with the Mainland will be a major driver of Hong Kong's competitiveness and it commended the Government's efforts to co-ordinate with Mainland authorities on finding ways that Hong Kong's advanced financial infrastructure can be used to improve the Mainland's financial intermediation, thereby benefiting both economies.

The Fund also welcomed the government's attempt to widen the territory's tax base with the proposed introduction of a Goods & Services Tax. The IMF has long called on Hong Kong to shore up its revenue base, warning that too much reliance on volatile revenue streams such as land sales and investment income leaves it vulnerable to economic shocks.

The IMF also welcomed progress made by the authorities on implementing Basel II, introducing the deposit insurance scheme, enforcing anti-money laundering and counter-terrorist financing guidelines, assessing potential sources of stress in equity markets and strengthening corporate governance.

.

 

 






Write a comment