BOC Hong Kong (Holdings) Ltd. (02388.HK) expects the city’s economy to grow a steady 2.5 percent next year with an unemployment rate of as low as 3.3 percent, the Hong Kong Economic Journal reported Wednesday.
Given the mild pace expected in interest rate hikes in the United States, home prices in Hong Kong are unlikely to drop more than 10 percent next year, the bank said.
It projected that the US will raise interest rates twice next year by 0.25 percentage point each time, sending the benchmark rate to 0.75-1 percent.
However, Hong Kong’s interest rates are unlikely to follow those increases, the bank said.
Meanwhile, it forecast that the Chinese economy will expand 6.9 percent this year and 6.8 percent next year.
The country’s currency will find support at 6.6 yuan per US dollar, it said, and the aggregate renminbi pool in the city is likely to remain stable.
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