Hong Kong s economy narrowly beat consensus expectations in Q---, despite myriad domestic and external drags on growth. However, the -.- print confirms our expectations for the city-state s economic expansion to cool in line with a stumbling mainland economy, and corroborates our full-year real GDP growth forecast of -.- for ----. ...That said, we do not foresee an acute correction taking hold in ----, and instead expect moderate price declines. Hong Kong s quadrennial legislative elections in September are unlikely to produce a significantly different government than the one currently in power in the city-state, as the failure to achieve universal suffrage has left intact a hybrid-electoral system that favours the pro-Beijing camp. Meanwhile, Beijing s grip on the city-state will continue to strengthen over the coming years as the Xi administra- tion maintains a politically conservative line. ...Hong Kong s quadrennial legislative elections in September are unlikely to produce a significantly different government than the one currently in power in the city-state, as the failure to achieve universal suffrage has left intact a hybrid-electoral system that favours the pro-Beijing camp. Meanwhile, Beijing s grip on the city-state will continue to strengthen over the coming years as the Xi administra- tion maintains a politically conservative line.
...Source: BMI, Census and Statistics Department ment consumption to decline slightly to -.- of the economy. ...Against an average growth rate of -.- per annum between ---------, we see investment growth averaging -.- through ----. Falling housing prices will have a significant effect on construction activity as developers hold off on new projects, but downside should be limited as the country continues to face supply constraints. In particular, the government looks set to continue to invest in new public housing supply, and we believe that this will offset the downturn in private property development to some extent. ...This will keep both export and import growth muted over the coming years, although we expect import growth to slightly outpace export growth on the back of a relatively stable domestic economy. As such, we see the balance of net exports declining into modest deficit territory over the coming years, and expect it to comprise --.- of GDP by ----.
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