Macroeconomic Forecast Hong Kong

The outlook for Hong Kong's trade-dependent economy remains decidedly grim, as it continues to be buffeted strongly by slowing global demand and a sharp slowdown in growth in mainland China. Indeed, exports (which constituted a massive 165% of GDP in 2008) fell for a fifth consecutive month in March, while unemployment rose to its highest level since the November 2005-January 2006 period in Q109. With this in mind, we are forecasting the special administrative region to experience a 3.6% contraction in real GDP in 2009, but continue to caution that risks remain weighted to the downside.

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