The Government yesterday rejected the Organisation for Economic Co-operation and Development's (OECD) bleak forecast of 0.9 per cent economic growth for Hong Kong this year, claiming its own 3.5 per cent forecast was already conservative. Local economists agreed with the Government, saying the OECD was too pessimistic about Hong Kong's interest rate outlook and the state of the mainland economy. The OECD staunchly defended its pessimistic outlook, predicting investment would probably slow significantly this year as exports slumped. Speaking on government radio, Financial Services Secretary Rafael Hui Si-yan said: 'Of all of the factors listed by the OECD, none had been overlooked by the Government at the time when the Budget was prepared. 'When it comes to this sort of thing, there is a lot of subjective judgment and we should not attach too much importance to it.' A government spokesman later echoed Mr Hui's comments. Finance and Transport Secretariat Press Office chief information officer Heidi Kwan Cheng Lai-man said: 'The government forecast has been quite conservative. 'The administration at this point in time has no intention of revising its forecast.' A selection of Hong Kong-based economists supported the Government's line. ING Baring Securities Hong Kong economist Kevin Chan said: 'The OECD's headline numbers are too low, 0.9 per cent growth is too pessimistic. 'The interest rate is already slightly down, and we expect another 50 basis point reduction from the current level.' Mr Chan said the lower interest rates should help the economy grow by 2.8 per cent this year, with much of the growth coming in the second half of the year. He said the OECD's estimate was only likely to be realised if there was a big resurgence of financial turmoil in Asia. 'The road will be bumpy, but I doubt you will see the same level of turmoil.' Bank of America vice-president and economist Frank Gong Fang-xiang agreed the OECD was being too negative. 'It is more pessimistic than our forecast, but it points out the risks facing the Hong Kong economy,' he said. Mr Gong said he expected Hong Kong's economy to grow 2 per cent this year, supported by growth in the mainland and in the United States. 'The mainland economy should grow at 8 per cent this year. I don't think that will be so difficult. The Government is working very hard to stimulate domestic demand,' he said. In London, OECD economist Charles Pigott defended the organisation's forecast, saying it was highly likely Hong Kong would suffer significantly from the dive in property prices and its loss of competitiveness. Mr Pigott conceded there was a 'fair degree of uncertainty' in his outlook. He said the size of the property market decline, estimated at close to 30 per cent, was bound to have an effect on future construction spending and would significantly reduce investment in Hong Kong as a whole. 'In a situation like this, you expect a contraction in investment, and that's the main subtraction from growth,' he said. Mr Pigott said Hong Kong would benefit in the medium and long term as a financial centre, but 'in the near term, the bursting of the financial bubble is a severe setback'. In defence of Mr Pigott, it emerged US investment bank JP Morgan was predicting the first recession in Hong Kong's statistical history. In its latest quarterly World Financial Markets report released last week, JP Morgan forecast real gross domestic product would fall 0.6 per cent this year.