Major lenders Standard Chartered and HSBC expect Hong Kong and China’s economy to rebound, even as Beijing continues to ramp up its Covid measures and Hong Kong’s economy posted its worst quarter in more than two years.
Their comments come as China imposed fresh lockdowns in Guangzhou, Wuhan and Xining last week.
“Hong Kong business is as strong as it has ever been,” said StanChart’s CEO Bill Winters. “We had record results in Hong Kong in the third quarter of this year, which seems incongruous with the ongoing, lingering Covid type restrictions and the challenges in China.”
Both banking powerhouses also posted their earnings recently.
I have every confidence Hong Kong will rebound strongly next year.
Winters attributed the stellar results to higher interest rates and recovering market climates.
People walk through Exchange Square in Hong Kong on October 28, 2022. Major lenders Standard Chartered and HSBC expressed confidence in the rebound of Hong Kong’s and China’s economy, even as China ramps up its Covid measures and Hong Kong’s economy posted its worst quarter in more than two years.”I think only about half the growth we’ve had … was coming from interest rates. The other half is coming from the fact that the markets where we operate are kicking back fully into gear, including Hong Kong and interestingly China as well,” he told CNBC.HSBC’s CEO Noel Quinn echoed similar optimism over Hong Kong.
“I think Hong Kong will rebound strongly following Covid … I have every confidence Hong Kong will rebound strongly next year,” Quinn said, adding that it was understandable that the economy would slow due to the lockdowns.
“Covid will pass. Eventually China will start to open up and the economy will rebound strongly,” Quinn told CNBC.
“We’re patient. We’re continuing to invest in China. We see strong growth prospects, as the market turns into a much stronger consumption market over the next decade.”
However, both banks acknowledged that the slowdown in China’s real estate sector is still a sticking point.
Total liabilities disclosed by major developers Evergrande, Kaisa and Shimao was more than 2.6 trillion yuan (equivalent to the current value of $357.21 billion) as of mid-2021, after which the three developers’ financial problems worsened. They make up only a fraction of the total real estate sector.
“It’s a problem that that is just going to have to work itself through,” said Winters.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
