Hong Kong's Economy To Grow By 3.2% This Year: ADB

Hong Kong's GDP is expected to grow by a moderate 3.2% this year, the Asian Development Bank said on Wednesday, as it warned of rising threats from trade spats between Beijing and Washington.

The bank said Hong Kong's favourable employment and wage conditions, and income effects from last year’s buoyant asset and property markets will prop up consumer sentiment.

It said government infrastructure mega-projects will push up capital spending while private investment could also rise on business optimism. It also said Hong Kong's growth rate will be 3.0% next year.

But the bank warned that exports may show slower growth due to slower demand from the mainland and uncertainty spawned by rising global trade and protectionism.

Growth in the mainland's economy is set to cool to 6.6 percent this year and 6.4 percent next year after logging 6.9 percent growth last year, it said.

The bank said trade spats between China the United States may cast a shadow on the economies of other countries in the region too.

The Philippines-based lender said it expects the region to expand at a 6 percent clip in 2018, slightly above its previous forecast, after recording 6.1 percent growth last year.

For 2019, it predicts growth will ease to 5.9 percent.

The bank said robust exports and strong domestic consumer demand are supporting activity across the 45 economies it covers in its annual report.

Risks to the growth outlook are driven mainly by "fears of escalating trade tensions," it said, referring to China-US trade tensions that have threatened to escalate into an all-out trade war. (Additional reporting by AFP)