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  Medium-term Prospects

82.    Since last year, our economy has been staging a broader-based recovery.  With the continued economic development of the Mainland and the closer economic ties between it and Hong Kong , our economy is expected to maintain steady growth over the next four years.  The trend GDP growth rate in real terms from 2006 to 2009 is forecast at 4 per cent.  With deflation coming to an end, the trend rate of increase in the GDP deflator is forecast at 1.5 per cent.  After combining these two forecasts, the trend growth rate of nominal GDP over the period from 2006 to 2009 is forecast at 5.5 per cent.

83.    Apart from being confronted with such domestic challenges as economic restructuring and unemployment, however, the economic performance of Hong Kong in the short to medium term will also be influenced by changes in the external economic and financial environment.  Such external factors include whether the global economy will rapidly slow down, whether the lagged effect of the oil price hikes is more serious than expected, whether the Mainland's economy will take a longer time to achieve a soft landing, the movements of the RMB, the extent of US dollar movements and their impact on the stability of the global financial markets, and whether interest rate hikes are bigger than generally expected.  At the same time, as the economy continues to expand, we need to ensure an adequate supply of manpower and land to meet the needs of the community and economic development, and to ensure that the market has enough flexibility to adjust, in order not to repeat the excessive boom and bust cycles we have experienced in the past.



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2004 | Important notices
Last revision date : 16 March, 2005