Hong Kong's growth is expected to grow 4 percent in 2012, according to the latest report on Hong Kong economy, issued by the International Monetary Fund (IMF) on Friday.
With a weakening in external demand, the IMF forecast that Hong Kong's economic growth would ease to 5.75 percent in 2011 and slow further to 4 percent in 2012. Consumer price inflation (CPI) is projected to average 5.5 percent in 2011 and remain in the 4-5 percent range throughout 2012.
The report also saw the quick rebound of Hong Kong economy from the global financial crisis propelled by a solid domestic economy and deepening linkages with Chinese mainland.
In the report, the IMF set out its strong endorsement of the Linked Exchange Rate system and commended the HKSAR Government's effort to safeguard financial stability.
"The Linked Exchange Rate system is a simple, credible, transparent and widely understood exchange rate regime that generates substantial benefits in terms of monetary and financial stability," said the report.
"We have no intention to change the system which has served Hong Kong well particularly during very volatile times. While Hong Kong has recovered reasonably well from the global financial tsunami, we are facing increasing downside risks to the global economy. We will remain vigilant and take all necessary measures to meet with the challenges ahead," said Mr John C Tsang, the Financial Secretary of HKSAR Government, welcoming the IMF Mission's continued support for the Linked Exchange Rate system.
"We welcome the IMF Mission's commendation of our countercyclical supervisory measures to strengthen the resilience of Hong Kong's banking system," said Mr Norman Chan, the Chief Executive of the Hong Kong Monetary Authority. "We are acutely aware of the highly volatile market conditions worldwide and are prepared to introduce appropriate and timely measures to maintain monetary and banking stability in Hong Kong."
The IMF Mission visited Hong Kong from October 17 to 27, to conduct the 2011 IMF Article IV consultation discussions.
Source:xinhuanet