The Hong Kong economy is plagued by internal and external factors
Liu Jianheng, a senior economist at Standard Chartered Bank in Greater China, believes that it is difficult to improve the negative economic situation in the short term. It is expected that the gross domestic product (GDP) will shrink by 1.5% this year and next. More rescue measures have created fiscal deficits.
Standard Chartered Liu Jianheng warned that the Sino-US trade war and local demonstrations have weighed on short-term economic performance.
Unemployment rate may hit 4.8%
Liu Jianheng pointed out that the cancellation of large-scale events and the frequent closure of shopping malls have further hit Hong Kong’s retail and tourism industries, warned that the Sino-US trade war and local demonstrations have dragged down short-term economic performance, and in the long term delayed recruitment and investment decisions in various industries. He even predicted that Hong Kong’s GDP will record a large negative growth year-on-year in the first and second quarters of next year, but it is expected to show a moderate U-shaped recovery in the long run.
Standard Chartered predicts that the local unemployment rate will gradually rise from a two-year low, and will rise further to 4.8% by the end of next year. At the same time, the Hong Kong Government’s fiscal policy will become a major help in alleviating the economic difficulties. It is expected that the fiscal deficits of this year and next will account for 0.5% and 1.5% of GDP.
Assistance in financing SMEs
To assist SMEs in financing, the Hong Kong Mortgage Corporation’s “90% Credit Guarantee Products” accepted applications yesterday, with the government providing 33 billion yuan of credit guarantee commitments. HSBC, Hang Seng Bank (00011), Bank of China (Hong Kong) (02388) and Standard Chartered will immediately launch offers including guarantee fees and loan waiver.
The Hong Kong Monetary Authority also wrote to the bank to “escort” the Jiucheng Credit Guarantee Scheme, stating that the Hong Kong Government has issued a “comfort letter” to the bureau to propose a guarantee commitment. The HKMA points out that if banks review related products, they can consider relevant government commitments as sufficient and effective mitigation factors for credit risk, or define the related products as “guaranteed” categories.