Economic Prospects for 2005
79. I remain cautiously
optimistic about the external economic environment in
indicators show that the
economy is still expanding at a reasonably solid pace,
and there is only expected to be a modest increase in US
interest rates. The
economies in the European Union will also continue to
outlook for the East Asian economies in the short term
remains promising. The
Mainland's economy will maintain its strong momentum,
and the macroeconomic adjustment measures should help
address the imbalances in some sectors and should be
conducive to long-term economic growth.
Taking these factors into account, we can expect
the global economy to fare well in 2005, though its
growth rate may not be as impressive as in 2004.
Hong Kong's external trade is
again expected to perform strongly in 2005, as the
earlier weakness of the US dollar will still be
advantageous to our export competitiveness in the short
term, and as the global economic outlook is promising.
With the opening of Hong Kong Disneyland, inbound
tourism will continue to thrive.
Private consumption expenditure should advance
further, buoyed by improved employment income and
positive developments in the asset markets.
The robust overall demand for goods and services
will in turn induce new investment expenditure.
In overall terms,
Hong Kong's economy is expected to achieve solid growth in
2005, with GDP forecast to grow by 4.5 to 5.5 per cent.
With a further pick-up in the economy and the
development and implementation of various tourism and
infrastructure projects, overall employment
opportunities look set to increase further, and the
unemployment situation in
will continue to improve.
Inflation will remain modest, with the Composite
Consumer Price Index expected to rise by a mere 1.5 per
cent for the year.