General Chamber of Commerce President Leung Siu based on the negative economic growth in Hong Kong throughout the year, and advocates quarantine-free customs clearance overseas before November

The US Federal Reserve raised interest rates for two consecutive months, and Hong Kong banks have not followed suit for the time being.

Leung Shau Kee, President of the Hong Kong General Chamber of Commerce, said in a TV program today (31st) that interest rate hikes by local banks will depend on changes in the level of interbank interest rates.

He also pointed out that it is believed that Hong Kong's economy will experience negative growth throughout the year. In the first quarter, the Hong Kong economy has already contracted by negative 4%.

He also pointed out that even with the full customs clearance of Hong Kong in the fourth quarter, the external situation is still unstable, coupled with the recent slowdown in exports, the economy in the second half of the year is still not optimistic.

However, he still hopes that Hong Kong can implement quarantine-free customs clearance before November, and is worried that if customs clearance is not carried out, Hong Kong will lose many business opportunities or opportunities for future economic growth.

Leung Shau-kee said that Hong Kong banks will depend on the rate of interest rate hike by the Federal Reserve in September. If the Federal Reserve only raises interest rates by half a percentage point, the one-month interest rate in Hong Kong will basically reach close to 2%, and local banks can still consider not raising interest rates.

If the Federal Reserve raises interest rates in November and December, Hong Kong banks will have a relatively high chance of raising interest rates at the end of the year.

Leung Shau Kee said on the TVB program "Speak Clearly" today that local banks will depend on the rate of interest rate hike by the Federal Reserve in September. If the Federal Reserve only raises interest rates by half a percentage point, Hong Kong's one-month interest rate will basically reach close to 2%. However, banks in Hong Kong may still consider not raising interest rates.

If the Federal Reserve raises interest rates in November and December, Hong Kong banks will have a relatively high chance of raising interest rates at the end of the year.

Expected to raise interest rates by up to 1/4%

He also pointed out that if the overall interest rate in the United States is increased by 1% in the future, it is estimated that the one-month interest rate will reach 2% to 2.5%, which is not very willing for Hong Kong banks to raise interest rates.

And if there is greater competition among banks, "maybe the banks may only increase by one-eighth or even at most one-quarter point. If the U.S. turns around and cuts interest rates next year, I believe the reduction will come back quickly." He expects the situation to be similar to 2018 and 2019. Years are similar.

Leung Shau Kee expects the Hong Kong economy to experience negative growth throughout the first half of this year.

(Photo by Luo Junhao/File photo)

Leung also pointed out that in February this year, when the fifth wave of the epidemic and the Russian-Ukrainian war had just begun, Hong Kong's economic growth forecast had been lowered to 1.2%, but he pointed out that the epidemic and the war lasted longer than expected.

He expects negative growth for the entire first half of the year, and no "good news" for the economy in the third quarter.

He also believes that even if the customs can be fully cleared in the fourth quarter, under the unstable external situation and the recent slowdown in exports, it is believed that the economy in the second half of the year is not optimistic.

He also said that even if there is a slight positive growth in some quarters in the second half of the year, it is believed that Hong Kong may experience negative growth again this year.

However, Leung Shau Kee still hopes that Hong Kong will resume customs clearance as soon as possible, because most cities around the world are now open to customs clearance, and Hong Kong, as an international financial center, is very important for external exchanges.

But Hong Kong has been slowing down for a long time now.

He worries that if customs clearance is not done, Hong Kong will lose many business opportunities or opportunities for future economic growth, describing customs clearance as an imminent matter.

He also pointed out that if a point-to-point or closed-loop customs clearance is required, it is inconvenient for business people to travel, and he stressed the need for a full-scale quarantine-free customs clearance.

Customs clearance︱Deng Bingqiang: After the epidemic is stabilized, the customs clearance capacity of the port will be improved. Shenzhen Bay can pass 24-hour travel inspection and customs clearance. Chamber of Commerce Leung Siu-kei expects Hong Kong interest rates to trend in line with the U.S. as soon as the end of the year. Property prices will not drop significantly.