| Abstract | The Asian financial turmoil exerted tremendous recessionary pressure on the Hong Kong economy in 1998, but conditions are expected to stabilise in 1999. Improvements have already been observed in the local money market and in interbank interest rates during the fourth quarter of 1998. Also, the recent rapid reductions in United States (US) interest rates signify the beginning of a lower global interest rate environment, which is beneficial to Hong Kong. As a result, Hong Kong's economy is projected to remain flat in 1999, after having contracted by an estimated 5 percent in 1998. The article features the major economic trends of Hong Kong during 1998, including the domestic demand and external sectors. Also, the economic prospects for 1999, including the high real interest rates and weakening export trade are discussed. |
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