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Elizabeth Cheung

The University of Hong Kong has downgraded its GDP growth forecast for the city from 3.4 per cent to 2.2 per cent for the year.
It comes as consumer confidence continues to fall, with the latest index showing Hong Kong still lagging behind the mainland, Macau and Taiwan.
In a report released yesterday, HKU researchers said the economy was expected to grow at a more modest rate due to the low interest rate environment and slower mainland growth.
It backs up a government forecast in August that economic growth would fall 2 per cent to 3 per cent this year.
HKU also puts expansion in private consumption at 1.7 per cent for the fourth quarter - 0.3 percentage points lower than the third quarter.
And the battering of the retail sector is expected to continue, with sales set to fall a further 2 per cent this quarter, for an annual decline of 1.2 per cent.
Meanwhile, the consumer price index is forecast to edge down to 4.1 per cent for the year - last year it was 4.3 per cent.
HKU attributed the slower growth forecast to external uncertainties such as the US gearing up for an interest rate rise amid a slow recovery, and a weakening mainland economy. The continuing pro-democracy protests are expected to have hit demand from local consumers, visitors and investment, but HKU said the extent of the damage was still unclear, though the impact would likely be minimal.
On Monday, a British Foreign Office report on the impact said confidence in the city's economy was "holding up" and there were "few signs of capital flight".
Meanwhile, consumer confidence has also taken a hit, a City University study shows. For the third quarter, the index stands at 80.2 points out of 100, down from 84 points in the second quarter.
It was the worst showing compared with the consumer confidence index for the mainland at 98.5 points, Macau at 85.1, and Taiwan at 84.2. Those polled were least confident about housing, followed by economic development and employment status.


Hong Kong's GDP growth outlook revised down to 2.2pc

The University of Hong Kong has downgraded its GDP growth forecast for the city from 3.4 per cent to 2.2 per cent for the year. Photo: K.Y. Cheng

The University of Hong Kong has downgraded its GDP growth forecast for the city from 3.4 per cent to 2.2 per cent for the year. Photo: Sam Tsang

News

Hong Kong

Low interest rates, weaker mainland economy expected to bite as consumer confidence wanes


The University of Hong Kong has downgraded its GDP growth forecast for the city from 3.4 per cent to 2.2 per cent for the year.
