Hong Kong Monetary Authority chief Norman Chan adds to gloom on economy
Norman Chan says higher rates in US may spur capital flight in region and hurt city
Hong Kong's de facto central bank chief Norman Chan Tak-lam warned that the city's financial system could come under pressure when the United States raises its interest rates - a day after Financial Secretary John Tsang Chun-wah said the city's economy may face a "perfect storm".
Their comments came as some economists warned that the outbreak of Ebola had added extra uncertainty to Hong Kong's economic outlook, which is already clouded by political turmoil, stubbornly high home prices and sluggish retail sales.
In the Hong Kong Monetary Authority's bulletin yesterday, Chan warned of the possibility of capital flight from emerging economies if the US Federal Reserve raised rates next year.
Tsang warned on Sunday that the government would lower its forecast for Hong Kong's gross domestic product growth this year, after a disappointing second quarter that saw growth slow and unemployment rise slightly. GDP growth was originally predicted to range between 3 and 4 per cent for 2014.
The government is due to reveal second-quarter economic data, including GDP, on Friday.
Terence Chong Tai-leung, an associate professor of economics at Chinese University, said he was concerned about Ebola's impact if the deadly virus reached Hong Kong. "The impact could be comparable with that brought by Sars in 2003," he said.
