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2012, May 23
2012, May 23 The International Monetary Fund cautions that Hong Kong may fall into recession next year amid weak trade and an unstable financial sector, reports the South China Morning Post.
Quoting the IMF, the post says Hong Kong's growth would slow to 4 percent next, or even become negative.
Rapid growth in bank loans also raised the risk of rising bad loans.
"Credit has been growing at an extraordinary pace, particularly for loans in foreign currency," the IMF said. "International experience would suggest that this rapid pace of credit growth has the potential to lead to a worsening of average credit quality, particularly if the business cycle swings to reverse."
The slowdown in exports could also lead to a deterioration of credit quality.
Sean Craig, the IMF's representative in Hong Kong, underscores that the IMF's assessment was that Hong Kong was performing very well economically. However, as a small, open economy it was highly vulnerable to shocks.
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I can't believe this information! Hong Kong seemed to be a very good place to be when the recession began in 2008! I can't believe this crisis affected that place that can be seen as a paradisiac isle for the business!
RCA Ieftin 2012