Hong Kong’s GDP may only be 3.3% in 2012, warns analyst
Continued deterioration in external demand is clouding UBS’ 12-month outlook for Hong Kong.
And for 2011, UBS' GDP projection is also well below consensus at 4.5%.
Here’s more from UBS:
| What the numbers say: 2Q11 GDP slowed to 5.1% y/y, compared to 7.5%y/y in 1Q11. In particular, Hong Kong registered a small sequential GDP contraction (at 0.5%q/qsa) in 2Q11, the first since 1Q2009. What they mean: GDP is the broadest measure of economic activity. It is strongly correlated with the profit cycle and provides important clues about inflation and the direction of policy. However, GDP has less relevance for cyclical policymaking because monetary policy is set by the US Fed according to the logic of Hong Kong’s fixed exchange rate. A strong commitment to the fixed exchange rate also limits fiscal policy in practice. 12-month outlook: Hong Kong’s growth outlook is increasingly clouded by the global financial market turmoil and the continued deterioration in external demand. This had led us to revise down our GDP projection in 2011 and 2012 to well below consensus at 4.5%y/y and 3.3%y/y. |
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