Hong Kong witnessed an overall economic growth of 1.9 percent in 2016, an official said on Wednesday. Hong Kong growth in 2017 will range between 2 to 3 percent, said Financial Secretary Paul Chan Mo-po while delivering the 2017-18 Budget.
In 2016, the local economy picked up progressively from a marginal growth rate of 1 percent in the first quarter to 3.1 percent in the fourth quarter, he said.
The unemployment rate averaged 3.4 percent last year, sustaining a state of full employment in general, he added.
Inflation pressure was moderate. The headline inflation rate for 2016 was 2.4 percent and the underlying inflation rate was 2.3 percent in 2016, the fifth consecutive year of easing, he noted.
Chan said, "Looking ahead, in 2017, the economic growth of advanced economies will be modest and patchy. This, coupled with new uncertainties brought about by political changes in many parts of the world and rising populist and protectionist sentiments, will further complicate the situation and render the global economic outlook volatile."
The headline inflation rate for 2017 as a whole will be 1.8 percent with an underlying inflation rate at 2 percent, he forecast, adding that the still-low global inflation and strong U.S. dollar have lessened the impact of the rise in international oil prices and thus keep imported inflation at a low level.
The supply of residential flats will increase substantially in the next few years, but the property market may have to face potential risks if the Fed normalizes interest rates faster this year, he said.
In the past years, the tight supply of residential flats, ultra-low interest rates and an influx of capital have made the local property market even more exuberant, resulting in high flat prices which are out of tune with the local economy, he said.
But the introduction of the Special Stamp Duty and Buyer's Stamp Duty, together with the earlier increase in Ad Valorem Stamp Duty, has achieved significant results in combating short-term speculation, curbing external demand and reducing investment demand, he noted.
Hong Kong's GDP per capita has now reached 44,000 U.S. dollars, overtaking Japan and many advanced economies in Europe, he said.
He attributed the success to the resilience, hard work and sustained innovative efforts of past generations, as well as the unique advantage of "one country, two systems," the fair and corruption-free system, rule of law, and the open and efficient market in Hong Kong.