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Hong Kong's exports are expected to expand at a slower, but sustainable pace in 2005, with total exports to rise 8.5 percent in value or 7.5 percent in volume, Hong Kong's Trade Development Council (TDC) Chief Economist Edward Leung said on Thursday.
He said domestic exports are forecast to fall 2 percent in value and 2.5 percent in real terms, while re-exports will show nominal and real growth of 9 percent and 8 percent.
Releasing the Hong Kong's Export Outlook for 2005: A Year of Consolidation report Thursday, Leung said the United States and the Chinese mainland, the world's two most powerful economic growth engines, will continue to fuel Hong Kong's exports growth.
He said the US dollar is expected to stay weak for some time because of the country's fiscal and current account deficits, enabling Hong Kong exports to stay competitive, particularly in the markets of European Union and Japan.
The United States' economic expansion will likely be restrained by interest rate hikes, while the Chinese mainland's economic growth will be slowed by stringent measures it has adopted to prevent its economy from overheating.
"Both factors impact on Hong Kong's exports, but fortunately not to an extent it cannot bear," he said.
Leung said despite the recent slackening of oil prices, volatility in crude oil prices remains a cause for concern, given the high demand compared with the nearly full capacity of production.
On local products, Leung expected electronics should continue to be the export growth leader, and exports of IT products will remain strong. Jewelry exports will be helped by the continuing, albeit slower, global economic rebound, and watches will have steady sales.
However, the outlook for toys is not bullish due to falling birth rates and a growing preference for electronic gadgets.
(Xinhua News Agency December 17, 2004)
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