Upbeat outlook reflects robust growth (hktdc.com)

Upbeat outlook reflects robust growth ( 01/06/2004 )

All the graphs are up in Hong Kong's robust economic picture. Visitor arrivals have risen especially from the Chinese mainland, consumer spending has taken off, the local property market is booming after six years of decline, and overall economic growth is expected to reach 6 per cent this year.

Fitch Ratings recently upgraded its outlook on Hong Kong to stable from negative, citing the city's long-term foreign currency and local currency ratings at AA- and AA+. The international ratings agency attributed the upgrade to a "significant easing of deflationary pressure, sharply improved prospects for economic growth, and diminished risks to the currency board framework".

Welcoming the Fitch upgrade, Financial Secretary Henry Tang said this reflects international recognition of Hong Kong's sound economic fundamentals and improved growth prospects.

Global competitiveness soars

Hong Kong jumped four places to become the sixth most competitive country or region in the world, according to a survey in the World Competitiveness Yearbook 2004. Conducted by the Lausanne-based International Institute for Management Development (IMD), Hong Kong rose through the ranks because of its improving economy and booming investment and trade flows, said IMD's Professor Stephane Garelli.

"The flow of investment has been very high. Hong Kong has continued to perform very well in terms of attractiveness of investment," Professor Garelli noted.

The good news is further buoyed by a 28 per cent growth in March visitor arrivals. Mainland visitors continued to show the strongest growth, increasing 47 per cent in March due to the easing of travel restrictions. (Details)

Strong retail market lures international brands

The surge in visitor numbers and strengthening consumer confidence helped to fuel March retail sales, as shoppers racked up HK$15.5 billion (US$2 billion) in transactions, up 9.4 per cent as compared to a year earlier. In the first quarter, retail sales swelled over 8 per cent in value or 7.3 per cent in volume.

The upbeat retail market prompted many international brands to open new stores. Upmarket labels such as Christian Dior and Prada opened flagship stores in Central, as did Spanish brand Zara and French label Jean Paul Gaultier. Designer labels such as Armani Jeans and Escada Sports are taking advantage of the shoppers' urge to splurge with new stores in Causeway Bay, while Swedish furniture store Ikea will open an 80,000 square foot shop in September.

Surge in cargo and passenger numbers

The Hong Kong International Airport (HKIA) was a major beneficiary as cargo throughput soared 22.5 per cent and passenger numbers rose 5.8 per cent as compared to April last year.

Hongkong Air Cargo Terminals Ltd or HACTL, the number one freight handler at HKIA, is on course to beat the global tonnage record it set last year. The firm moved 703,000 tonnes of cargo in the first four months of this year, a 16 per cent year-on-year rise.

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