IMF highly commends HKSAR Government's efforts to boost economic growth and safeguard financial stability
The Mission commends the HKSAR Government's efforts to boost economic growth and safeguard financial stability. The Mission considers that Hong Kong's financial system remains resilient, and Hong Kong continues to play its role as an international financial centre under the challenging global macro-financial environment. The resilient financial system is premised on Hong Kong's strong institutional frameworks, in particular the high-quality financial sector oversight, substantial capital and liquidity buffers, and the well-functioning Linked Exchange Rate System (LERS). As economic activity normalises, Hong Kong's economy is recovering strongly.
The Financial Secretary, Mr Paul Chan, said, "I welcome the Mission's highly positive assessment of Hong Kong. The Mission fully recognises that Hong Kong's economy is demonstrating momentum for a strong recovery, and commends that the HKSAR Government's fiscal policy has robustly led Hong Kong in navigating through the economic challenges in the past few years. Once again, the Mission affirms that Hong Kong's high-quality financial sector oversight ensures the resilience of the financial system, while upholding Hong Kong's status as a premier international financial centre in the evolving global environment.
"The Concluding Statement commends the Government's multifarious efforts to boost economic growth, including the establishment of the Co-Investment Fund to support innovation and technological development, enhancement of the talent attraction programmes, adoption of a more co-ordinated approach to increase residential land and housing supply, etc. The Mission's positive assessment is a reflection of our capability, determination and accomplishment in maintaining financial stability and economic growth. It also clearly shows that under our new policy vision of integrating a 'capable government' and a 'highly efficient market', we are leaping forward steadily and bolstering prosperity."
The Chief Executive of the Hong Kong Monetary Authority, Mr Eddie Yue, said, "I welcome the Mission's recognition of our robust regulatory and supervisory frameworks, which have built up strong capital buffers and ample liquidity to safeguard financial stability amidst global and market uncertainties. As noted by the Mission, our LERS is an anchor to the economic and financial stability in Hong Kong, and its credibility continues to be supported by the mechanism's transparency, our ample foreign reserves, prudent fiscal policy frameworks, robust financial regulation and supervision, and the economy's flexibility. We will continue to stay vigilant and safeguard macroeconomic and financial stability while seizing every opportunity to develop the financial markets."
The Mission notes that despite slowing growth and tightening financing conditions around the world, the normalisation of domestic economic activity, in particular private consumption, from the removal of anti-epidemic measures will support a robust domestic recovery in Hong Kong. The path to the post-pandemic new normal on the Mainland and in Hong Kong is also smoother and more rapid than anticipated with large pent-up demand from the past, leading to a stronger economic recovery in both places.
The Mission recommends that the HKSAR Government continue to strengthen linkages with other cities of the Greater Bay Area and members of the Regional Comprehensive Economic Partnership. It also suggests that devoting more resources for innovation and technological development can provide additional growth engines and boost economic vibrancy. In this connection, it commends the Co-Investment Fund and the HKSAR Government's recent efforts in enhancing the talent attraction programmes. Notably, it considers that the Co-Investment Fund can constructively promote innovation and technology. The Mission also recommends that the HKSAR Government continue to expand the talent attraction programmes as necessary.
The Mission commends the HKSAR Government's and financial regulators' appropriate and prudent approach to safeguarding financial stability, ongoing measures to further enhance financial sector oversight, and regulation of virtual asset-related activities. To reinforce Hong Kong's status as an international financial centre, the Mission recommends that the HKSAR Government develop climate finance and continue to assist in promoting the capital market connectivity between the Mainland and the rest of the world.
The Mission recognises that financial stability risks arising from an adjustment in the residential property market have been mitigated by existing housing-related macroprudential measures, and recommends that these measures be maintained. It also commends the HKSAR Government's strengthened co-ordination in boosting housing and residential land supply, including identifying more land and streamlining statutory and administrative procedures.
The Mission visited Hong Kong from March 20 to 31. Discussions were held with HKSAR Government officials, financial regulators and private sector representatives. The Concluding Statement is in the Annex. The relevant full report will be discussed by the IMF Executive Board in May 2023.
Ends/Friday, May 5, 2023
Issued at HKT 15:00
Issued at HKT 15:00