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Delve into the latest economic updates detailing global and local developments impacting Hong Kong's economy amidst the ongoing financial crisis. Explore key sectors such as financial services, trading, logistics, tourism, and real estate while gaining insights into job losses, stimulus packages, and the 2009 economic outlook.
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Update on the Hong Kong Economy for The Task Force on Economic Challenges Government Economist 22 January 2009
Global developments since last meeting (1) • Concern over financial market meltdown receded, but global downturn deepening, taking its toll on world trade • Pressure now spread to wide range of businesses, due to downward spiral from credit crunch; asset market plunge and deteriorating sentiment from job losses • Asia also hard hit; exports of many Asian economies showed double-digit declines in Nov • Inflation receding fast, amid weak demand conditions
Global developments since last meeting (2) • Central banks pursuing aggressive monetary easing; benchmark interest rates approaching zero in some advanced economies • Governments continue to roll out more stimulus packages; US’s huge package still in the pipeline • Financial institutions in the US and UK continued to report huge losses over the past weeks; UK government just announced its second rescue plan
Local developments since last meeting • Exports suffered across-the-board decline in Nov • Retail sales and restaurant business show signs of relative improvement during latter half of Dec • Housing market stabilised somewhat after drastic decline • Interbank rates down to level before global crisis; credit conditions for some sectors eased somewhat, but credit situations in hard-hit sectors like I/E trade remain severe • Unemployment rate risen further; job vacancies sharply lower • 14 measures from Central Government on 19 December 2008 to support Hong Kong economy
...leading to a successive mark-down in forecasts Average of private sector forecasts for 2009
US imports falling even faster, which impact severely on Asia’s exports
US inventories have depleted significantly; but it will take some time for inventory rebuilding to resume
EU’s business sentiment lowest in 15 years; imports cut back sharply amid recession mode
Industrial value-added growth at record low* • Excluding January and February, in which the year-on-year comparisons are distorted by the different timing of • the Lunar New Year each year.
Financial services sector: unemployment/vacancy* * Private sector vacancies posted by the Labour Department. Latest unemployment rates are provisional.
Financial services sector: SME weekly survey on business receipt
Exports down 7% in November... 2003 SARS 1998 AFC 2001 global downturn Current global crisis
...drastic decline in cargo flows impacting severely on logistic sector
Trading and logistics: unemployment/vacancy* * Private sector vacancies posted by the Labour Department. Latest unemployment rates are provisional.
Trading and logistics: SME weekly survey on business receipt
Retail sales still down in Nov; tourist arrivals showed some relative improvement in Dec * The December 2008 figure is a crude estimate.
Tourism and consumption-related sector: unemployment/vacancy* * Private sector vacancies posted by the Labour Department. Latest unemployment rates are provisional.
Tourism and consumption-related sector: SME weekly survey on business receipt
Property market took a breather in December after drastic decline for 2 months
…but Government’s increased construction to provide some offset New private construction projects have stalled…
Real estate and construction sector: unemployment/vacancy* * Private sector vacancies posted by the Labour Department. Latest unemployment rates are provisional.
Real estate and construction sector: SME weekly survey on business receipt
Further mark-down by private sector analysts on Hong Kong’s GDP in 2009
Our latest assessment • With global recession now underway, worst is yet to come; timing of recovery depends on effectiveness of stimulus packages by major economies • HK economy likely to experience negative growth for several quarters, leading to further job losses and rising unemployment • Government’s efforts to ease credit access and create employment to render some help during this difficult period; support from the Central Government a confidence booster • Inflation will come down visibly, which should help enhance competitiveness • Confidence is key; HK economy set to recover once the external environment improves