Financial Secretary John Tsang has announced that the economy grew 2.3% last year, below the 3.9% annual average over the past decade.
In his Budget speech today, Mr Tsang said this year would be challenging, and forecast economic growth of just 1-3%.
Reviewing the economic performance last year, Mr Tsang said global economic performance was less than spectacular. While the Mainland economy remained steady and there were signs of recovery in the US, Hong Kong’s trade performance was beset by a weakening Eurozone economy and Japan’s recession.
Looking forward, the global economy is likely to stay on a slow-growing path in the post-financial tsunami period, and local consumption and investment sentiment will be dampened by the uncertainties over the US interest rate hike and visitors’ weaker spending power.
The headline inflation rate was 4.4% last year and the underlying inflation rate was 3.5%, after netting out effects of the Government’s one-off relief measures. As rental pressure eases, Mr Tsang forecast that the headline inflation rate for 2015 will be 3.5% with an underlying inflation rate of 3%.
The unemployment rate remained low at 3.2% on average last year, but sentiment turned cautious as private consumption grew moderately and investment expenditure was soft, which may affect job creation.
