Hong Kong’s number of bankruptcy petitions filed last month rose to the highest in almost two years after economic growth slowed to what the government predicted would be the weakest since 2009.
The number of bankruptcy requests submitted in January increased 62 percent from a year earlier to 837, according to data posted on the website of the Official Receiver’s Office today. That was the highest number since March 2011 when 866 were filed, the data showed.
Hong Kong officials are balancing the need to stoke growth with efforts to cool a housing market that the International Monetary Fund said last year is at risk of an abrupt correction. The city’s economy may have expanded about 1 percent last year, K.C. Chan, the financial services secretary, said yesterday.
“The bankruptcy data is a signal that is worthy of attention but there is no strong evidence to conclude that the situation is worsening,” Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd., said by phone today. “Hong Kong is still fundamentally strong with a low jobless rate. The major risk is an earlier reversal of interest rate cycle which may aggravate the situation.”
Hong Kong Monetary Authority Chief Executive Norman Chan this month warned that household debt is “near historic high levels” and adds to repayment risks in the housing market.
The ratio of household debt amounted to 58 percent of gross domestic product in the third quarter and 59 percent in the fourth, nearing 2002’s historic high of 60 percent, Chan told lawmakers on Feb. 4.
The city’s economy grew 4.9 percent in 2011, 6.8 percent in 2010 and contracted 2.5 percent in 2009, according to government data.
To contact the reporter on this story: Stephanie Tong in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Chitra Somayaji at email@example.com