Hong Kong sticking with 2-3% growth target despite rate cut: Paul Chan
Finance chief maintains earlier forecast of city’s economic growth this year, despite base interest rate cut to 4.5 per cent on Thursday
Hong Kong’s finance chief has maintained his forecast of economic growth of between 2 and 3 per cent this year, citing a volatile external environment despite a base interest rate cut by the Monetary Authority.
The authority’s move matched the US Federal Reserve’s cut hours earlier to its target range of 4 per cent to 4.25 per cent, during the sixth meeting of the Federal Open Market Committee this year. The new base rate is the lowest since December 2022.
Although Hong Kong’s economy performed quite well in the first half of this year, driven by strong exports of goods and services, a robust stock market and a large influx of tourists, Chan said external factors led him to resist making a stronger forecast.
“Even with the interest rate cut, there are still too many significant external variables which we cannot control, such as the development of tariffs and how far the United States’ protectionism goes,” Chan said.
“Under such circumstances, we think that a cautious approach to maintain a GDP growth between 2 and 3 per cent will be more prudent.”