HONG KONG - Hong Kong's financial chief John Tsang said Wednesday that the city's economy was expected to grow by four to five percent in 2011, and the inflation rate to stand about 4.5 percent.
While delivering his budget speech on Wednesday, Tsang said the relatively stronger growth sustained by the Mainland and Asian economies will continue to benefit Hong Kong. But the relatively fragile economic recovery of the US and Europe will make this year a testing time for the export performance of Asia and Hong Kong. He expected a GDP growth of four to five percent for the year.
Tsang said the risk of rising inflation is mounting in Asia. The soft US dollar and possible sustained increase in global food and commodity prices will put more inflationary pressure on Hong Kong.
The continued rise in the Mainland's food prices and local rentals are expected to have a more noticeable effect on Hong Kong's inflation this year, he added, forecasting the headline and underlying inflation rates for 2011 as a whole will average 4.5 percent.