Citi Private Bank: expected 0.7% economic growth this year, weakened by trade war

Financial news

Written by: Lin Leqian

2020-01-15 17:59

Affected by external and local factors, our economy fell into recession last year. Zhang Minhua, Citi Private Bank ’s Asian investment strategist, believes that due to the improvement of the retail market, the booming stock market and the low interest rate environment will help stimulate the economy, Hong Kong ’s economic growth is expected to be 0.7% this year and to rise to 1.8% in 2021.

She said that in the fourth quarter of last year and the first quarter of this year, the economy will still record negative growth. This year, tourism revenue will fall sharply, and the unemployment rate will also rise slightly. However, she said that local consumption showed signs of bottoming out. The relief measures introduced by the government last year accounted for 1.2% of Hong Kong's gross domestic product, which she believed would help stabilize the economy this year.

Trade war influence continues to weaken

China and the United States are about to reach the first phase of the trade agreement. Peng Cheng, director of Asian investment strategy at Citi Private Bank, believes that the second phase of negotiations is more difficult, but the trade war has been going on for nearly three years, and companies have already responded to tariffs. The proportion of exports is rising, and it is expected that the influence of the future trade war will continue to weaken.

Regarding RMB exchange rate, Zhang Minhua believes that because the United States has removed China from the list of currency manipulators, it is believed that the two countries may have reached a consensus on the issue of RMB exchange rate. In the past, the trend of the renminbi was linked to the trend of the trade war. If the two countries lower their tariffs, it is expected that the renminbi will rise to 6.7 against the US dollar. If the tariffs remain unchanged, they will remain at the level of seven.

Peng Cheng predicts that global economic growth will pick up to 3% this year, mainly due to monetary easing policies, industrial activities and rebound in international trade, which will drive global stock market returns of 6 to 8%, while the valuation of Hong Kong stocks is lower than major global stock markets. Cloud, network security and fintech.

Standard Chartered Huiyi expects Hong Kong's economic growth to be plus or minus 1% this year

UBS: China's economic growth expected to be 6% in 2020

HSBC expects US economic growth to outperform global U.S. stocks this year

Deloitte expects Hong Kong's GDP to fall 1.2% this year

Citigroup Citigroup Hong Kong GDP growth