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Friday, August 14, 2009

Hong Kong emerges from recession

BBC News

The economy of Hong Kong has emerged from recession, posting growth of 3.3% in the three months from April to June.The seasonally adjusted figures were better than had been expected and the government has raised its forecast for growth in the whole year.

It followed the emergence from recession of Singapore, which grew an annualised 20.7% in the second quarter. Hong Kong's growth was negative for four consecutive quarters, starting in the second quarter of 2008.

The growth of 3.3% compares with a revised contraction of 4.3% for the first three months of 2009.The government was previously expecting the economy to contract by between 5.5% and 6.5% in the whole of 2009, and is now predicting a contraction of between 3.5% and 4.5%.

Economic growth is measured by gross domestic product (GDP). "The GDP data was much better than we expected, partly because the exports were better and partly because of a pick-up in private consumption," said Paul Tang, chief economist at Bank of East Asia.

"Private consumption is being driven up by stock market gains and by the property sector, which started doing well." Although there has been growth compared with the previous three months, the economy is still running below last year's levels, with a year-on-year contraction of 3.8%.

Private consumption in the second quarter rose 4% compared with the previous three months. It was boosted by the stock market, which has rebounded 80% since early March, as well as property prices, which have risen 20% this year.



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