Zero growth: Hong Kong Trade Development Council cuts 2015's export forecast on back of uncertain global economy
Hong Kong's Trade Development Council has cut its forecast for the city's export growth this year from 3 per cent to zero amid uncertainties in the global economy.
Hong Kong's Trade Development Council has cut its forecast for the city's export growth this year from 3 per cent to zero amid uncertainties in the global economy.
TDC director of research Nicholas Kwan Ka-ming said a possible interest rate rise in the United States could further weigh on Hong Kong's export sector in the medium and long term, but played down its impact on the city's export performance for the rest of the year.
"Most export orders for this year have been placed," Kwan said yesterday.
He said a possible US rate rise would dampen consumer sentiment in emerging markets and weaken demand for exports, but stressed the impact would become more prominent only in the longer term.
He noted Greece's debt crisis had continued to drag down the recovery of the European Union, one of Hong Kong's major export markets.
The TDC's export index, an indicator gauging the city's export performance, plunged from 46.8 in the previous quarter to 37.1 for this quarter - its lowest level in about three years.
The council blamed the slide on the worse-than-expected global economic performance and lingering concerns about a global economic downturn.
A reading below 50 reflects negative sentiment among exporters, while a higher figure points to positive sentiment.
"The global economy now faces several potential risks," said Kwan, noting that the mainland, another important trading partner, had seen economic growth slow.
The extent of the yuan's recent depreciation was far smaller than the fall of Southeast Asian currencies, giving limited support to Hong Kong's exports, the researcher added.
Ryan Lam Chun-wang, head of research at Shanghai Commercial Bank, expressed concern that the mainland's slowing growth would take a heavy toll on Hong Kong's economy and eventually cost more Hongkongers their jobs.
"The labour market remains strong because the deterioration in trade performance has yet to spread to other sectors," he said.
Hong Kong's unemployment rate was 3.3 per cent in the three months from May to July - 0.1 percentage points higher than in the April to June period.
"If the mainland continues to slow down, more Hongkongers will lose their jobs," said Lam. "The retail, financial and real estate sectors would be hit hardest."
