Hong Kong economic prospects worse than last year: BEA

(HKEJ) Hong Kong’s economic prospects in 2016 are worse than last year amid weak exports and falling tourism revenue,Bank of East Asia Ltd. (00023.HK) deputychief executive Adrian Li Man-kiu said.

Speaking in a forum, Li also said the property market will undergo negative adjustments while the labor market is expected to weaken, the Hong Kong Economic Journal reported on Tuesday.

Meanwhile, the global economy will have to face the challenge posed by the dynamics of differing interest rate environments in the United States and Europe, Li said. The US Federal Reserve has started it policy tightening cycle, but Europe is further loosening its monetary stance.

Nonetheless, Li reckons Hong Kong will benefit by taking up a crucial role in mainland China’s 13th Five-Year Plan and “One Belt, One Road” strategy.

The bank forecast thatthe US will raise the Fed fund rate two or three times this year for an aggregate rise of 0.5 to 0.75 percent.

The US dollar is expected to strengthen by 2 percent this year, a pace slowerthan in the last two years, while the renminbi will weaken to 6.65 against the greenback should the Chinese economy maintain a growth rate of 6.5 to 6.7percent.