HONG KONG -- Hong Kong Financial Secretary John Tsang said the city will face a bigger risk of falling into recession next year because of global economic volatility.
"Hong Kong will be inevitably affected and there will be a bigger risk of recession next year," Mr. Tsang told the city's legislators. "The crisis is extraordinary...."
Economists said a deteriorating job market as a result of layoffs in the financial sector and sharp falls on the city's stock market have taken a toll on consumer income and spending, and they warned that weakening global demand will severely hurt the city's exports. Hong Kong's Hang Seng Index is down 47% since the beginning of the year.
DBS said in a research note it cut its 2008 growth forecast for the city's gross domestic product to 3.8%, from its previous projection of 4.4%, and its forecast for 2009 growth to 2.7% from 4.4%.
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