The 2010 economic outlook for Hong Kong is subject to uncertainties because the pace of global economic recovery is still unclear, Financial Secretary John Tsang says.

He today told lawmakers Hong Kong's economic performance will inevitably be affected by the external environment.

"Given the sheer size of the US economy, it would be difficult for the emerging economies in Asia to replace the US in leading global economic recovery. According to past experience, double-dip recessions are not uncommon in the US. If the US economy is to show a renewed relapse, it is very likely that Hong Kong's economic recovery will also be affected.

"Reportedly, Paul Krugman has recently indicated that the chance of the US falling back to recession in 2010 can be as high as 40%, while both Martin Feldstein and Joseph Stiglitz have opined that the odds of the US economy seeing a strong recovery in 2010 are small. The International Monetary Fund holds a similar view that the global economic recovery will be weak, and that there are downside risks to the global economic outlook."

Close watch

The Government will continue to monitor the economic situation and, if necessary, introduce measures to ensure that the economic recovery is on solid ground. An appropriate exit strategy is key as this will ensure sustainable economic growth, he added.