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HONG KONG - HONG Kong's economy grew 6.3 per cent in 2007, but growth will slow to between 4 and 5 per cent this year, Fincancial Secretary John Tsang said in his maiden budget on Wednesday.
On inflation, Mr Tsang said that given continued economic expansion and high global commodity prices, 'the underlying inflation in 2008 is estimated to rise to 4.5 per cent.'
But he added that upon the implementation of various one-off measures proposed in this budget, the inflation rate would fall to 3.4 per cent in 2008.
Hong Kong has averaged economic growth of just over 7 per cent annually for the past four years, riding on China's economic boom and a stable global economy. That has boosted tax revenues and land sales, resulting in a record fiscal surplus.
The economy grew 1.6 per cent in the fourth quarter of 2007 on a seasonally adjusted quarterly basis, slowing from the previous quarter, government data showed.
In the third quarter, the economy expanded by 1.8 per cent from the second quarter.
On an annual basis, gross domestic product in the fourth quarter rose 6.7 per cent from a year earlier, topping forecasts for a 6 per cent increase and beating a revised 6.3 per cent increase in the third quarter.
Hong Kong's economy is set to slow this year as a weakening US economy is likely to hurt export growth.
Mr Tsang also forecast economic growth of 4 to 5 per cent in 2008, down from 6.3 per cent in 2007.
He added that the SAR posted a record provisional HK$115.6 billion (S$20.8 billion) fiscal surplus for 2007/08. -- REUTERS
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