Hong Kong’s economic growth could slip further

Hong Kong’s economy grew 5% in 2011, which was lower than the previous year's 6.8%.

Financial Secretary John Tsang warns that Hong Kong must be well-prepared to face the consequences of the city's decelerating economy. Gross Domestic Product growth of 1% to 3% has been forecast for Hong Kong for 2012 as a whole.

If today’s unstable external environment continues, Tsang said the government cannot rule out lowering the economic growth forecast even further.

Hong Kong’s economy grew 5% in 2011, which was lower than the previous year's 6.8%. Inflation in 2011 rose 5.3%. The 5% economic growth in 2011 was at the lower range of the forecast the government made in August.

Hong Kong’s inflation is expected to gradually decrease further in the coming quarters. The forecast rates of headline and underlying consumer price inflation for 2012 as a whole will be at 3.5% and 4%, Tsang said.

Tsang is also urging the public to be prudent and aware of the potential risks when buying property.

His appeal comes after rising property prices, which in April were up 8% on December. The housing affordability ratio was 46% in the first quarter.

Tsang said the government will introduce further measures when necessary to ensure the stable and healthy development of the residential property market.