Hong Kong may have to brace for volatility amid challenges in 2024, financial secretary says

Hong Kong may have to gear up for “quite a lot of volatility” in 2024, Hong Kong’s financial secretary Paul Chan instructed CNBC.

Next 12 months will probably be “filled with exterior challenges,” Chan instructed CNBC’s Emily Tan. “Interest charges [are] going to be larger for longer, geopolitical tensions will proceed. And there may even be elections in the U.S. So there could possibly be quite a lot of volatility,” he mentioned.

Hong Kong is a particular administrative area of China, and just like the mainland, has confronted a disappointing post-Covid financial restoration. Beijing has tapped fiscal stimulus to shore up financial restoration and include its spiraling debt disaster among the many nation’s property builders.

Chan is upbeat about China’s restoration.

He mentioned he believes the world’s second-largest financial system is ready to “develop steadily in the pursuit of top of the range growth.”

As Hong Kong’s financial system is carefully related to the mainland’s, it can give Hong Kong “sturdy backing and optimism” and lend town the financial increase it wants.

China has set itself a development goal of around 5% for 2023. According to the International Monetary Fund newest evaluation in November, China’s financial system is projected to put up a development of 5.4% in 2023. However, this development can also be anticipated to gradual to 4.6% in 2024 due to property market weak spot, the IMF mentioned.

Moody’s downgrade not a good one

Moody’s downgraded its outlook on China‘s authorities credit score rankings to unfavorable on Tuesday.

On Thursday, the credit score rankings company trimmed its outlook on Hong Kong — a transfer which Chan mentioned was not honest.

“I do not assume it’s a honest downgrade of our financial outlook,” Chan mentioned. “We have already moved from the underside and [are starting] to enhance strongly.”

He maintained that Hong Kong had a “very sturdy and really resilient” financial development of about 3.2%.

The finance secretary mentioned the primary pillars of Hong Kong’s development are companies exports, capital investments, and consumption.

Hong Kong’s exports of services for the third quarter drew in 193.6 million Hong Kong {dollars} ($24.8 million), marking a year-on-year bounce of 16%. The metropolis additionally recorded a 4.1% development in the third quarter in contrast to a 12 months in the past.

The IMF expects Hong Kong to put up a 4.4% development in actual GDP.

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