Hong Kong Pulls Out of Recession
Friday, August 14, 2009; 6:45 AM
HONG KONG -- Hong Kong's economy broke out of a yearlong recession in the second quarter as the territory benefited from strong growth in mainland China and better conditions in the West, the government said Friday.
The southern Chinese territory's economy, slammed four straight quarters by free-falling world demand for exports, grew by 3.3 percent on a seasonally adjusted quarter-to-quarter basis, the government said.
With the global economy starting to level out, Hong Kong made a less pessimistic forecast for all of 2009, saying gross domestic product was set to shrink between 3.5 percent and 4.5 percent rather than 5.5 percent to 6.5 percent.
"As the global economy is still subject to uncertainties, we cannot afford to be complacent," said Hong Kong's Financial Secretary John Tsang.
Higher demand for Hong Kong's exports, particularly from mainland China, where massive stimulus spending and relaxed monetary policy is driving growth, helped explain the turnaround.
Exports dropped 12.4 percent in the second quarter compared to the same period last year, the government said. That was tamer than the nearly 23 percent drop-off in the first quarter.