By Sophie Leung
Sept. 21 (Bloomberg) -- Hong Kong’s economic recovery will be at a slower pace for the rest of the year because of weak demand for exports after companies restocked, said Renee Chen, an economist at Nomura Holdings Inc. in Hong Kong.
Gross domestic product may rise a seasonally adjusted 0.4 percent this quarter from the previous three months, the economist said in an interview in Hong Kong on Sept. 18. That would compare with the 3.3 percent gain in the second quarter that ended a yearlong recession.
Financial Secretary John Tsang said Sept. 16 that “the worst for the economy has passed, but its outlook remains uncertain.” The city government has allocated HK$87.6 billion ($11.3 billion), or 5.2 percent of gross domestic product, for stimulus and relief spending since 2008.
“The recovery will be very, very subdued,” Chen said. “The pace of the recovery will be slower in the second half because the strong rebound in the second quarter was due to demand from restocking.”
Asset price gains also boosted second-quarter growth by encouraging spending, the economist said. Chen forecasts a 0.8 percent expansion in the fourth quarter from the previous three months.
Hong Kong’s economy is still contracting year-on-year, shrinking 3.8 percent in the second quarter.
“A double-dip recession is unlikely in Hong Kong, as the city is benefiting from China’s robust economy,” Chen said.
Record new lending in the first half of the year and a 4 trillion yuan ($586 billion) stimulus package drove the Chinese economy’s recovery to a 7.9 percent expansion in the second quarter from a year earlier.
Nomura raised its forecast for China’s growth this year to 8.5 percent from 8.1 percent on Sept. 18.
To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net
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