Former Treasury Chief Optimistic About HK's Economy

Former Secretary for Financial Services and the Treasury, KC Chan, said on Saturday that he is optimistic about Hong Kong's economic future, despite a slash in the city’s growth forecast.

He made the comment a day after the government revised its full-year economic growth forecast from two to 3.5 percent to one to two percent, and reported a four percent year-on-year contraction for the first quarter.

Authorities have also warned that the local economy will continue to be bogged down by the external environment.

Speaking to reporters after a radio show, Chan, who's also an adjunct professor at the Hong Kong University of Science and Technology, said he believes the SAR will be able to ride out the challenges.

"As we know, because of the inflation worries, many central banks will have to raise their interest rates, and no doubt it will have a dampening effect on the economic activities worldwide, and Hong Kong will therefore suffer along these other countries," Chan said.

"Hong Kong has a very strong economic base, we have seen how resilient Hong Kong is."

Chan also said people should not read too much into the Hong Kong Monetary Authority stepping in several times to prop up the SAR currency's peg to the US dollar in the past few days.

"I always call this not so much an intervention, I think it's a very well-understood mechanism under our linked exchange rate system," he said, adding that the move was "routine" and "natural".