HK growth to slow in second half of year, says finance chief

HONG KONG — Hong Kong’s top finance official has warned that the city’s economy faced difficulties, and growth would slow.

“In the second half of the year, Hong Kong still needs to face the challenges brought by the fluctuating financial markets, weak foreign trade and slower tourism,” Financial Secretary John Tsang said in his blog yesterday. “Economic growth may be slower than in the first half.”

The city’s economy expanded 2.6 per cent in the first six months of the year, and Mr Tsang revised his growth forecast for the year to 2 to 3 per cent, from 1 to 3 per cent earlier this month.

Hong Kong’s Hang Seng Index of shares has fallen 18 per cent since the end of June, as mainland equity markets plunged, amid signs that China’s economy is slowing at a faster pace than previously thought. The city has become relatively more expensive for tourists, as its dollar is pegged to the greenback and has held its value while most Asian currencies weakened.

The city’s budget and current-account surpluses would help it overcome possible difficulties, Mr Tsang said. BLOOMBERG