Fiscal Policy - Strong Growth Buoys Public Finances in Hong Kong

DUBLIN, Ireland--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/reports/c88355) has announced the
addition of "Hong Kong Commercial Banking Report Q1 2008" to their
offering

The Hong Kong Commercial Banking Report provides independent
forecasts and competitive intelligence on Hong Kong's commercial
banking industry.

From Q108 we will be calculating the Commercial Banking Business
Environment Rating (CBBER) for each of the countries surveyed by BMI.
This will permit a more systematic and comprehensive comparison of the
conditions within the banking industries of the various countries than
was possible in the past. For each country, it will also facilitate a
comparison of the conditions within the banking sector and conditions
prevailing in other sectors. Hong Kong's overall CBBER is 79.5. The
equivalent figures for the USA and the eurozone are 84.8 and 81.4,
respectively. Hong Kong's CBBER is higher than that of any other
country in the Asia Pacific region. Australia offers the closest
comparison (at 76.3), followed by Japan (at 75) and Singapore (at
74.9).

Within the CBBER, the most important aspect is the (banking)
market element of the limits of potential returns. This element
accounts for 42% of the overall CBBER. Hong Kong's rating for this
element - 74.4 - is slightly lower than the overall CBBER and lower
than the country element of the limits of potential returns - 78.9. By
both regional and international standards, Hong Kong also scores very
highly in both the market element (96.7) and the country element
(80.9) of the risks to the realisation of returns.

Hong Kong's economy continues to perform strongly, as domestic
consumption remains robust and the knock-on effects of Chinas booming
economy continue to provide a boost to the territory. However, while
consumption is set to remain strong, a softening of external demand
for Hong Kong exports as a result of a slowing US economy is a
downside risk to growth. Nonetheless, demand from China will help
support Hong Kongs merchandise exports, and global demand for services
from the territory will maintain their current robust momentum. We are
forecasting Hong Kongs real GDP to expand 6.2% in 2007, and while this
will be down slightly from the 6.8% growth witnessed in 2006, it will
nevertheless remain robust.

Fiscal Policy - Strong Growth Buoys Public Finances

Hong Kong posted a budget surplus of HKD4.8bn (US$616mn) in the
April-July period, as the territory continues to make impressive
fiscal improvements. Robust economic growth has boosted tax
collections, and this rise in government revenues has been accompanied
by prudence on the expenditure side, helping to buoy public finances.
However, focus must now be turned to ensuring long-term stability, as
Hong Kong faces an ageing population and a narrow tax base which is
susceptible to a future economic downturn. The proposed goods and
services tax will help switch the territory away from an income tax
focused system towards a system based more around consumption, but
will unfortunately continue to face much opposition.

Topics Covered:

Executive Summary

Key Issues

Changes to the Commercial Banking Forecast

Hong Kong Commercial Banking SWOT

International Context

Per-Capita Deposits

Methodology

For more information, visit
http://www.researchandmarkets.com/reports/c88355

Research and Markets
Laura Wood, Senior Manager
Fax: +353 1 4100 980
press@researchandmarkets.com

Copyright Business Wire 2008