(Xinhua)
Updated: 2007-11-21 11:29

The International Monetary Fund (IMF) Staff Mission on Tuesday expects Hong Kong's economy to grow 5.5 percent to 6 percent this year, below 5 percent in 2008, and average around 5 percent over the medium term.

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The city will continue to face the challenges of high revenue volatility and rising ageing-related spending pressures over the medium term, according to IMF.

The IMF mission made this assessment in its concluding statement at the end of a visit to Hong Kong for the annual Article IV consultation from October 29 to November 7.

Welcoming the government's policies to enhance the city's competitiveness, the mission said broadening the tax base remains important to limit revenue volatility. The mission also looks forward to the upcoming consultation on healthcare reforms to address the rise in healthcare costs in future as the population ages.

The mission reiterates its support for the planned general competition law, which will help strengthen market flexibility. It also suggests that the government carefully balance labor-market flexibility and wage protection.

Financial Secretary of Hong Kong John Tsang said the government will continue its efforts to strengthen the city's status as an international financial center.