Hong Kong Economic Forecast

By: EconomyWatch Content Team   Date: 13 June 2010

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Hong Kong Economic Forecast Hong Kong has a free market economy, one that depends heavily on international imports and exports, as well as finance. Because of this, the country has been exposed to economic struggles that other countries face. For instance, during the recent global financial crisis, Hong Kong was affected right along with all other countries. However, prior to this crisis period, Hong Kong has a large share of re-exports, which pushed the Gross Domestic Product or GDP to 404% in 2007. China has been integrating into Hong Kong for several years specifically through trade, transportation, finances, and tourism. The country’s mainland is largest for trading in all of Hong Kong, accounting for close to 49% of all export trade. Because of this, China has been able to reduce travel restrictions, boosting the number of tourists going into Hong Kong by 4.5 million in the year 2001 and 16.9 million in 2008. Although Hong Kong still relies somewhat on the industrial manufacturing sector, the service sector has grown dramatically, accounting for 92% of the GDP.

Hong Kong GDP Forecast

As mentioned, the global financial crisis hit Hong Kong hard just as it did other countries. With this country being an open economy, it had its share of challenges but even so, the government and people were able to rebound much faster than what anyone anticipated it would. Most believe the quick recovery was because of China’s integration. If you look at the Hong Kong GDP (Gross Domestic Product, Current Prices, US Dollar) for 2008 at the very start of the crisis, numbers were at $215.13 billion in US dollars and then by the end of 2009, only a slight change occurred, closing numbers out at $210.731 billion. This shows to some degree how well the country recovered. Even for 2010, experts are not expecting much of a change, predicting that the GDP will be around $223.69 billion. The largest change is expected by year-end 2015 when the GDP should hit $288.11 billion (US dollars).

Hong Kong Unemployment Forecast

Current reports show that the Hong Kong population is right at seven million. Considering the size of the land, this means the country is densely populated to some degree. For the number of people living in Hong Kong, approximately 3.7 million are working. The Hong Kong unemployment rate is low at just 5.127%, which some believe is due to this being a free market country that has very little government intervention. In looking at unemployment for the end of 2010 and five years from now, forecasters expect the numbers to remain virtually the same.

Hong Kong Inflation Rate Forecast

As a part of predicting forecasts, experts will use data for the year opposed to data for end-of-period based on a 2000=100 average consumer prices index. The Hong Kong inflation rate for 2009 was 0.52%, a reduction of 87.86% from 2008 when reported numbers were 4.29%. Forecasts being given for 2010 show a dramatic increase of 284.62%, closing the year out at 2.00%. Then, forecasts further out predict that 2015 will end up at 2.6%.

Hong Kong Current Account Balance Forecast

The way in which the Hong Kong current account balance is forecasted is by focusing on transactions between the economy and the remainder of the year. For this, all transactions would be considered with the exception of items pertaining to finances and capital. The account balance in 2008 was at $29.30 billion, reported in US dollars. From that year to the end of 2009, a reduction of 20.22% was experienced, which put the new account balance at $23.373 billion. Now for 2010, forecasts are showing that an increase around 15.35% will occur, putting the closing numbers for that year at $26.96 billion. By 2015, it is expected the current account balance for Hong Kong will be at $21.778 billion, again in United States dollars.


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