Excess Money Supply Could Hurt Hong Kong's Recovery, Warns IMF

The International Monetary Fund warns that Hong Kong is at risk of another economic crash if the government does not tighten its stimulus measures, reports the South China Morning Post.


According to the Post, IMF's statement is a sharp break from its stance last year which said continued stimulus spending would be key to reviving the economy. However, in October, the organisation noted that excess money supply had developed after the city's swift recovery from the financial crisis.


Quoting the IMF, the Post says that the most effective tool that could be adopted by Hong Kong was a tightening of underwriting standards, including eligibility criteria for mortgage insurance.

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