The international investment banks are all optimistic for the prospect of Hong Kong for it has maintained growth momentum. The Credit Suisse First Boston forecasts that the government of the HK SAR may achieve balance between revenue and expenditure this year. The Hong Kong economy will grow at 4.4 percent next year, and hopefully becomes the economic body with best performance in Asia.

In 2005, the exchange rate of US dollar to Euro is to fluctuate at 1:1.3, said chief regional economist Tao Dong. He predicted the consumption price index will rise to 1.5 percent; economy will increase at 4.4 percent. The Hong Kong people's average salary will rise by 3 to 5 percent and the unemployment rate is to drop to 6.5percent.

The deficit of HK SAR will take a favorable turn owing to some favorable factors, e.g, number of negative mortgage decrease; drop of exchange rate of US dollars and rise of rent. The HK SAR government is predicted to achieve balance and therefore is not very urgent in imposing commodity and sales tax.

The strong recovery of Hong Kong economy is attributed to reduction of people who have negative assets. At the same time, banks have sufficient funds due to funds inflow into HK, which is a consequence of expectation for yuan appreciation.

By People's Daily Online