| BUSINESSWEEK ONLINE : DECEMBER 13, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- INTERNATIONAL FIGURES OF THE WEEK
Country Focus/Hong Kong (int'l edition) Hong Kong's recovery is broadening, but it still faces obstacles. Real gross domestic product rose 4.5% from a year ago, topping the 3% expectation. The pace was up from 0.7% in the second quarter, after a record five-quarter recession. Improved foreign trade is leading the upturn, but a revival of tourism and stronger consumer spending are also adding fuel, while increased capital inflows are boosting the key financial-services industry. The government recently raised its forecast for 1999 economic growth to 1.8%, from its earlier 0.5% estimate. Hong Kong's recovery is modest compared to some Asian neighbors. The problem: With the prime rate at 8.5% and consumer prices expected to decline by 4%, real interest rates are more than 12%. That's why business investment in construction and equipment is set to fall 14% in 1999. The problem will be exacerbated if the Federal Reserve raises U.S. interest rates further. That would force Hong Kong's rates up, since its currency is pegged to the dollar. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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RELATED ITEMS International Figures of the Week (int'l edition) Country Focus/Hong Kong (int'l edition) CHART: Hong Kong GDP INTERACT E-Mail to Business Week Online | |||
