Hong Kong Chief Executive Donald Tsang (曾蔭權) said measures to offset the territory’s first recession since 2003 were working and the government will take further steps if they’re needed to aid banking, business or unemployment.
“If we see major stresses again then we will introduce measures geared specifically to these three elements of our total scheme,” Tsang said yesterday at a press conference in Tokyo, where he met with officials to discuss the global economic crisis and tourism.
Hong Kong is in its first recession since the SARS epidemic in 2003 as exports and domestic demand slow.
Hong Kong’s unemployment rate rose to the highest in 28 months, the government said on Tuesday, which may add pressure on Tsang to unveil a stimulus package in the budget due on Feb. 25.
No Hong Kong banks are “in trouble” and the government has already taken measures to ensure they are well capitalized, there is sufficient liquidity and businesses are able to obtain credit, he said.
The seasonally adjusted jobless rate for the quarter ended Jan. 31 climbed to 4.6 percent, from 4.1 percent through December. The jobless rate may rise above 4.6 percent this year, Tsang said yesterday.
“I’m afraid it will rise,” he said, adding that he didn’t believe it would reach levels seen after the 1997 to 1998 Asian economic crisis.
“I personally do not believe that on this occasion we will face that high of a level of unemployment,” he said. “But we are prepared for a figure higher than 4.6 percent.”
Hong Kong’s GDP shrank a seasonally adjusted 0.5 percent in the third quarter of last year from second quarter, after contracting 1.4 percent in the second quarter.