Hong Kong needs to brace for a "particularly bad" year, as its externally-oriented economy is vulnerable to the recession in Europe, financial troubles faced by emerging markets, as well as neighbouring economies devaluing their currencies, Financial Secretary John Tsang says.
During a radio phone-in programme today, Mr Tsang noted that these factors are not only affecting Hong Kong's trade and commerce sector, but also the tourism sector.
He said the global economy has yet to normalise in the wake of the 2008 financial tsunami and that Hong Kong's economy has been supported by domestic consumption these past few years.
"What we've been trying to do since always, from time to time, is to get more money into the hands of people. So that they can increase their consumption and we have found that to be effective."
After predicting growth of 1% to 2% in 2016, Mr Tsang said he did not rule out negative GDP growth if the global economic outlook remains grim. But he said without the $38.8 billion package of relief measures announced in his Budget, Hong Kong's growth rate could be close to zero.
Mr Tsang stressed that a zero growth rate would be the worst case scenario and assured citizens that the Government was preparing for the economic challenges ahead with a number of initiatives such as the Future Fund - which is aimed at generating more stable income through investments.
"I have set up the Future Fund. The Future Fund basically is an investment strategy, take out $200 billion, put it in much longer-term investments, hopefully that will give me a better return and give us more protection for the future. So we are working on all fronts to try to deal with a possibly difficult future that we may be facing," he said.
Mr Tsang added that the Government will subsidise the development of financial technologies to maintain Hong Kong's competitiveness.
On the property market, he reiterated that now was not the right time to ease cooling measures as Hong Kong did not meet the suitable conditions at this point to make any adjustment.
Mr Tsang said the Government was monitoring the situation closely, adding that it needed to look at a host of factors first, before it could determine the economic impact of relaxing the measures.
