HSBC downgrades Hong Kong 2001 GDP growth forecast to 2.2 pct from 3.4 pct

HONG KONG (AFX-ASIA) - HSBC chief economist George Leung said the bank is revising downward its forecast for Hong Kong's GDP growth in 2001 to 2.2 pct from the previous estimate of 3.4 pct on concerns about current world prospects and the volatility in financial markets. "We are concerned about the deteriorating global economy, in particular the U.S. and Japan, which is expected to affect Hong Kong's external trade," Leung said. "There are also worries about the volatility in the global financial markets" and the impact this could have locally, Leung said. Leung said although Hong Kong has cut interest rates some 100 points since the beginning of this year, there has been little response seen in the economy. "The economic momentum is there but it is not as strong as we had expected," Leung said. Leung said the bank has sent a brief note to its institutional clients about the downgrade and will come up with a detailed report early next week.

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