Hang Seng Bank upgrades 2004 GDP forecast for HK

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Last updated at: (Beijing Time) Thursday, March 11, 2004

Hang Seng Bank upgrades 2004 GDP forecast for HK

Hang Seng Bank announced on Wednesday its upgraded 2004 GDP forecast for Hong Kong from 4 percent to 5.5 percent in real terms.

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Hang Seng Bank announced on Wednesday its upgraded 2004 GDP forecast for Hong Kong from 4 percent to 5.5 percent in real terms.

According to the Bank, GDP should reach 1,443 billion HK dollars in constant 2000 dollars this year, from 1,368 billion in 2003.

Chief Economist of the Bank Vincent Kwan said the revised forecast has taken into account the increasing momentum of the Hong Kong economy over the past few months, with private consumption rebounding strongly and asset prices sustaining an uptrend. These favorable factors together with low interest rates should continue to underpin the strong economic rebound in the months ahead, he added.

The Bank said it is cautious about the strength of domestic demand in the second half of the year, therefore, the forecast, nonetheless, is a shade lower than the official forecast by the government at 6 percent.

Kwan said that some negative factors might emerge in the secondhalf of the year, which could slow the pace of the economic rebound. These include fiscal policies turning contractionary as the government steps up its cost control measures and implements tax increases announced last year, the possibility of interest rate hikes in the United States in the second half of 2004, and the sustainability of the rapid rebound in property prices, especially at the higher end of the market, said Kwan.

Source:Xinhua

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