Hong Kong's economy expanded robustly in the first quarter this year, with its Gross Domestic Product (GDP) up 7.2 percent from a year ago, said the Hong Kong government on Friday, who forecast an GDP increase of about five to six percent for the whole year of 2011.
The growth in the first three months was slightly higher than the already appreciable seven percent for 2010 as a whole, mainly due to strong exports that surged about 16.8 percent year on year, said the government in its First Quarter Economic Report 2011 released in the day.
The 2011 forecast was one percent up from estimates made in February, revealing government's positive attitude for the overall economic environment. Globally expanding economy, "led by the thriving Asian and emerging economies," along with robust domestic consumption market, will help Hong Kong's economy holding up in the whole year, the report said.
Meanwhile, the government also noticed that some uncertainties, such as the sovereign debt problem in the eurozone, further macroeconomic policy tightening in Asia as well as political unrest in the Middle East and South Africa, may pose some downside risks to Hong Kong's exports in the coming quarters.
A more sever inflation was recorded from January to March, with more solid global recovery, loose monetary environment and a weaker U.S. dollar. The CPI rose to 3.8 percent from 2.7 percent in the fourth quarter of 2010.
Further increase in food prices and housing costs were also contributing to the climbing CPI. The government estimated the CPI will rise to 5.4 percent for the whole year, 0.9 percentages up from its former forecast.
Housing market remained "overheating" in Hong Kong, with overall residential flat prices up 9 percent in the first quarter, surpassing the peak in 1997. The government said it has increased land supply and the city's monetary authority has stepped up examinations on banks' mortgage business.
"The government will monitor the housing market situation closely to ensure its stable and healthy development," the report said.