Growth Forecasts Revised Down

Hong Kong became the second Asian economy behind Singapore to officially enter recession, after GDP contracted by a seasonally adjusted 0.5% q-o-q in Q308 to compound the 1.4% decline recorded in the previous quarter. Given Hong Kong's significant exposure to external headwinds, this is not an entirely surprising development, and we expect the economy to be buffeted further by ongoing global economic woes going forward. Against this backdrop, we have decided to lower our 2008 and 2009 growth forecasts from 4.6% and 4.1%, respectively, to 3.1% and 0.3%.

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