DESPITE only modest growth in the industrialised economies, Hong Kong's economic momentum, sustained by the economic expansion of the rest of Asia, will achieve five per cent growth next year, Hongkong Bank predicts. However, the banking industry's profitability will not be as juicy as in the past two golden years, owing to rocketing operational costs and inflexible lending rates. Hongkong Bank's forecast on the economy and the banking industry concurs with Standard Chartered Bank's, announced this week, which also expected five per cent economic growth and a less prosperous banking environment. The five per cent estimated growth is marginally lower than the 5.3 per cent projected for this year. Although Hong Kong's exports will not be boosted by the expected modest recovery in the industrialised nations, it will be compensated by the buoyant economies in Asia, particularly China's, Hongkong Bank says. Apart from external trade, growth will be stimulated by domestic demand supported by private consumption and infrastructure development. The bank is optimistic that, given appropriate macro-economic control measures, China's economic growth will be slowed from 13 per cent in 1993 to a healthy nine per cent in 1994, and inflation will drop to 10 per cent from 12 per cent. China's export expansion is expected to accelerate, but weak international demand and sustained domestic growth will keep the growth at a moderate pace. ''China's total trade growth is likely to slow slightly, but will nevertheless continue to fuel Hong Kong's external trade and service sectors,'' said Vincent Cheng, senior manager of economic and strategic research at Hongkong Bank. In the territory, growth in exports of goods and services, private consumption and construction would continue to be the greatest impetus to economic growth. ''Hong Kong's exports are expected to increase slightly less rapidly in 1994, by about 13 per cent compared with a projected 13.5 per cent in 1993,'' he said. ''Domestic exports will remain depressed, reflecting the continued shift of Hong Kong's manufacturing base to China.'' Sustained demand for imports from developing Asia would contribute the most to export trade expansion, he said. Continued economic growth and the tight labour market would keep inflation high, at about eight to 8.5 per cent. However, the pressure would be greatly relieved if improved infrastructure led to higher productivity. Therefore, the bank hoped that political disagreements would not hinder the territory's infrastructure development. ''If Hong Kong is to retain its competitiveness in world markets and its role as a regional services and financial centre, it is important that its infrastructural development is not harmed by the Sino-British discord,'' the bank said. The negative real interest rate, a result of high inflation and low interest rates, had led to asset price inflation in property, which badly affected the profitability of companies operating in Hong Kong, Mr Cheng said. ''The Government has to do something to control spiralling property prices,'' he said. In the banking sector, increasing operation costs would dampen the prospects for profit growth compared with the last two years. Lending growth would continue to outpace deposit growth due to the low interest rates. ''Banks will be more cautious in their lending in view of the capital constraints.'' Mr Cheng said. Yet, banks cannot raise their lending rates due to pressure from society. ''For instance, to suppress mortgage loan demand, banks should raise the mortgage rate. But they cannot,'' he said, implying that whatever bank took the lead would be spurned. ''The high profit growth experienced in the last two years is unlikely to be repeated in 1994.''