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Global Economic Outlook
Hong Kong: 2011 Outlook
By Adam Wolfe
- Hong Kong’s recovery will settle into a more sustainable pace in 2011.
- Rising asset prices will fuel further credit expansion, adding additional inflationary pressures as the output gap narrows.
- Hong Kong cannot tighten its monetary policy, nor will it abandon the USD peg in 2011, but it can tighten fiscal policy to provide some counter effect.
Growth Dynamics: Rebounding Nicely
Thanks to rising asset prices and resilient trade flows, the slowdown in H2 2010 has been less severe than we anticipated, requiring us to revise upward our forecast for the year. We now expect