The subdued growth forecast is tied to the slowdown in Mainland China.
Hong Kong economy, as measured in terms of real GDP, is projected to slow from 3.8% in 2017 to 3.2% in 2019, according to a global economic outlook published by the IMF.
The city’s muted growth forecast is tied to a moderation in the Mainland’s economy, according to BMI Research, as Beijing embarks on a more sustainable growth plan by curbing systemic financial and environmental risk. Softening housing market is also to blame as the heated property sector starts to show signs of wear.
IMF also noted that consumer prices are expected to trend upwards from 1.5% in 2017 to an expected 2.1% in two years time. The increase in inflation levels is set to curb consumer sentiment amidst limited purchasing power.
“Lower levels of consumer confidence comes on the back of Hong Kong's slower economic growth trajectory and inflation, which will constrain consumer optimism,” added BMI.
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