THE economic lights of Hong Kong will shine brighter and GDP growth over the next two years is forecast at a sustainable 5.5 per cent, according to leading bankers and business people.
The main reason for the pick- up from the downside of last year was the removal of political uncertainty - primarily the appointment of Tung Chee-hwa as Chief Executive and the assurance of a smooth handover.
Also boosting growth is the buoyant Chinese economy.
In Hong Kong, total export and re-exports were up 4 and 5 per cent respectively in real terms in the first quarter, while domestic exports were down 4 per cent. GDP growth was about 6 per cent, in line with the forecast 5.5 per cent.
When the new SAR government takes over on July 1, it will hold an estimated $359 billion, boosted by an expected surplus in this year's budget of $31.7 billion.
Population growth has kept ahead of forecast, while the labour force keeps on expanding. Taking into account immigrants from China and other returnees, the population could be touching seven million by 2001.
According to some government officials, Hong Kong's new infrastructure projects have made it possible to prepare for the increase in population.