A ferry crosses Victoria Harbour in Hong Kong on Nov 13, 2021. (BERTHA WANG / AFP)
HONG KONG - The International Monetary Fund has reinforced its assessment of Hong Kong's economic and financial positions, recognizing that Hong Kong's financial sector has continued expanding robustly even during the COVID-19 pandemic.
In its Staff Report released on Tuesday, the IMF reaffirmed Hong Kong's position as a major global financial center with a resilient financial system, sound macroprudential policies, and robust regulatory and supervisory frameworks.
The IMF supported the Hong Kong government’s approach to containing housing market risks and increasing housing affordability, which involves macroprudential measures, demand-side management measures and an increase in housing supply
The IMF noted that a large fiscal stimulus has helped mitigate the impact of economic shocks and speed up economic recovery in the city.
It noted that Hong Kong’s economy is recovering strongly from the pandemic, with real activity increasing by 6.4 percent in 2021. The IMF forecast a growth of 3 percent for the city in 2022.
The IMF supported the Hong Kong government’s approach to containing housing market risks and increasing housing affordability, which involves macroprudential measures, demand-side management measures and an increase in housing supply.
Furthermore, it commended that Hong Kong has made significant progress in addressing climate change in the past decade and acknowledged the government’s ongoing efforts to enhance the green and sustainable finance ecosystem.
Hong Kong’s Financial Secretary Paul Chan Mo-po welcomed the IMF’s recognition of the city’s strong economic recovery supported by swift and bold policy responses.
“Having considered that the economic situation in Hong Kong has taken a drastic turn with the outbreak of the fifth wave of the pandemic, I have announced in the 2022-23 Budget counter-cyclical measures, involving a total commitment of over HK$170 billion, with a view to providing appropriate assistance for individuals and businesses affected by the fifth wave of the local outbreak,” he said.
“The counter-cyclical measures, together with those introduced in the past two years and multiple rounds of the Anti‑epidemic Fund, involving a total commitment of over HK$650 billion, are effective in mitigating the socio-economic impact of the pandemic,” he noted.
Monetary Authority Chief Executive Eddie Yue reiterated that the Linked Exchange Rate System will continue to be an anchor of economic and financial stability
He said the government will continue to closely monitor the local epidemic situation, take necessary and effective fiscal measures and further strengthen Hong Kong’s already robust institutional frameworks with a view to fostering economic recovery after the pandemic and safeguarding financial stability.
Monetary Authority Chief Executive Eddie Yue Wei-man also welcomed the IMF’s reaffirmation of the robustness and resilience of Hong Kong’s banking and financial system. He reiterated that the Linked Exchange Rate System will continue to be an anchor of economic and financial stability.
The IMF Mission held virtual discussions with government officials, regulators and private sector representatives in Hong Kong from Dec 1 to 15 regarding the 2022 Article IV Consultation. The concluding statement of the mission’s assessment was published on Jan 20, followed by the IMF Executive Board’s endorsement for the staff report on Feb 10.
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