IMF staff report commends Hong Kong’s robust economic and financial situation

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31st May 2023 – (Hong Kong) Hong Kong’s economic and financial situation has been given a positive evaluation by the International Monetary Fund (IMF) in its Staff Report released on 31st May, following the conclusion of the 2023 Article IV consultation with the Hong Kong Special Administrative Region (HKSAR). The report, which was prepared by the IMF Article IV Mission and endorsed by the Executive Board, provides a comprehensive analysis and assessment of Hong Kong’s economy and financial system.

According to the Staff Report, Hong Kong is a major international financial centre with robust institutional frameworks, high-quality financial sector regulation, substantial capital and liquidity buffers, and a well-functioning Linked Exchange Rate System (LERS). The report also acknowledges Hong Kong’s strong economic recovery after the COVID-19 pandemic and the HKSAR Government’s proactive efforts to solidify Hong Kong’s status as an international financial centre.

Hong Kong’s Financial Secretary, Mr Paul Chan, welcomed the IMF’s positive evaluation of Hong Kong’s financial resilience and long-term economic and financial developments. The Chief Executive of the Hong Kong Monetary Authority, Mr Eddie Yue, also welcomed the IMF’s affirmation of the robustness and resilience of Hong Kong’s banking and financial system, as well as the smooth functioning of the LERS.

The IMF Article IV Mission visited Hong Kong from 20th March to 31st March, 2023, and held discussions with HKSAR Government officials, financial regulators, and private sector representatives. The discussions covered a wide range of economic and financial issues, including the impact of the COVID-19 pandemic, Hong Kong’s fiscal policies, financial sector regulation, and the outlook for the economy.

The Staff Report notes that Hong Kong’s economy has rebounded strongly from the pandemic-induced recession, with strong growth expected to continue in 2023 and beyond. The report also acknowledges the HKSAR Government’s efforts to support economic growth and competitiveness, including measures to enhance infrastructure, promote innovation and technology, and attract foreign investment.

The Staff Report highlights the importance of continued vigilance in monitoring risks to financial stability, including potential vulnerabilities in the property market and the impact of global economic conditions on Hong Kong’s financial system. The report also encourages the HKSAR Government to continue to enhance its regulatory framework and maintain a strong commitment to transparency and accountability.

Overall, the IMF’s Staff Report provides a positive assessment of Hong Kong’s economic and financial situation, highlighting the city’s resilience and strong recovery from the COVID-19 pandemic. The report also acknowledges the HKSAR Government’s efforts to support economic growth and competitiveness and emphasises the importance of continued vigilance in monitoring financial stability risks.