IMF REINFORCES HK ASSESSMENT

Following the conclusion of the 2022 Article IV Consultation, the International Monetary Fund (IMF) today reinforced its assessment of Hong Kong’s economic and financial positions in its staff report with a detailed analysis.

Reaffirming Hong Kong’s position as a major global financial centre with a resilient financial system, sound macroprudential policies and robust regulatory and supervisory frameworks, the IMF recognised that Hong Kong’s financial sector has continued to expand amid the COVID-19 pandemic.

The IMF also noted that a large fiscal stimulus has helped mitigate the impact of economic shocks and speed up economic recovery. It supported the Government’s approach to containing housing market risks and increasing housing affordability, which involves macroprudential measures, demand-side management measures and an increase in housing supply.

Furthermore, it commended that Hong Kong has made significant progress in addressing climate change in the past decade and acknowledged the Government’s ongoing efforts to enhance the green and sustainable finance ecosystem.

Financial Secretary Paul Chan welcomed the IMF’s recognition of the city’s strong economic recovery supported by swift and bold policy responses.

He said: “Having considered that the economic situation in Hong Kong has taken a drastic turn with the outbreak of the fifth wave of the pandemic, I have announced in the 2022-23 Budget counter-cyclical measures, involving a total commitment of over $170 billion, with a view to providing appropriate assistance for individuals and businesses affected by the fifth wave of the local outbreak.

“The counter-cyclical measures, together with those introduced in the past two years and multiple rounds of the Anti‑epidemic Fund, involving a total commitment of over $650 billion, are effective in mitigating the socio-economic impact of the pandemic.

“We will continue to closely monitor the local epidemic situation, take necessary and effective fiscal measures and further strengthen our already robust institutional frameworks with a view to fostering economic recovery after the pandemic and safeguarding financial stability.”

Meanwhile, Monetary Authority Chief Executive Eddie Yue also welcomed the IMF’s reaffirmation of the robustness and resilience of Hong Kong’s banking and financial system, reiterating that the Linked Exchange Rate System will continue to be an anchor of economic and financial stability.

The IMF Mission held virtual discussions with government officials, regulators and private sector representatives in Hong Kong from December 1 to 15 last year regarding the 2022 Article IV Consultation. The concluding statement of the mission’s assessment was published on January 20, followed by the IMF Executive Board’s endorsement for the staff report on February 10.

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