Hong Kong's trade account with the world is expected to plunge into the red by a record $160 billion this year, research by US investment bank Goldman Sachs predicted yesterday. Rising consumer demand for imports and lacklustre export performance will combine to push up the territory's year-on-year trade deficit in goods by 14 per cent from $138 billion last year. Pressure on Asian exports to major importers is also expected to remain under pressure from weak prices. The bank's research team is confident that cyclical rather than structural factors underlie the sluggish trade performance. They also predict that a surge in receipts from Hong Kong's service sector, particularly tourism, will more than offset its visible deficit. Sun Bae Kim, executive director of Asia Economic Research, expects the territory's domestic exports to continue their decline and re-export receipts to tumble as the mainland increases direct trade with foreign countries. This is despite a rapid increase in the growth of Chinese exports since September last year. Mr Sun said: 'The competition from other ports in China increased in the past year, which increased direct trade between China's special economic zones and foreign countries and depressed Hong Kong's re-export growth.' Last year the territory's trade slumped to its lowest levels of increase for 14 years with imports growing 3 per cent and exports by 4 per cent in real terms. The export growth of most Asian economies fell sharply during the year from above-average rates of expansion in the previous two years. Donald Hanna, also an executive director with Goldman's, said the wide diversity among regional economies ruled out structural issues as being the cause of the downturn. Mr Hanna blamed a collapse in export prices from the major trading countries - principally the Organisation for Economic Co-operation and Development (OECD). 'Historically, growth in OECD economies has been the single-most important determinant of cyclical movements in Asian exports,' he said. 'What has been unusual with Asia's export slowdown since 1996 is that export prices have collapsed despite robust OECD growth, a pattern that has tended to occur only in times of OECD recession.' The price collapse has been concentrated in products such as machinery, transport, electronics and transport equipment that Asian exporters have relied upon. Mr Hanna expects a pick-up in demand as economic growth improves in the major importing countries but is cautious about the prospects for a turnaround in prices. Goldman's nominal trade deficit forecast is toward the upper end of estimates. Clarence Wong Shek-fai, senior economist for the Hong Kong Bank, anticipates a deficit of about $140 billion while Joe Lo Nim-cho, senior economist with Citibank, is expecting about $135 billion.