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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey D who wrote (28198)	2/15/1999 12:16:00 PM
From: Proud_Infidel	Respond to of 70976

IMF says Hong Kong could begin economic recovery in second half of this year HONG KONG (AP) -- Hong Kong's economic recovery could begin late this year, the International Monetary Fund said in a government report released Thursday. IMF directors also praised Hong Kong for continuing to keep its currency linked with the U.S. dollar at a stable rate, but it advised the government against repeating last year's massive intervention in stock markets, which was aimed at driving out speculators. The IMF made the comments in a public notice that followed its annual meeting with China in January. IMF officials have held consultations with China regarding Hong Kong every year since 1990. Despite solid economic fundamentals, Hong Kong was not immune to the financial havoc brought about by the Asian financial crisis -- and the territory's record-high unemployment was proof of that, the report said. With the gradual decline of asset prices, labor costs, and inflation, economic recovery in Hong Kong ''could begin to emerge in the second half of the year,'' the IMF said in the government report. ''Hong Kong has made substantial economic adjustments over the past year. We are pleased with the IMF's positve assessment,'' the report quoted Financial Secretary Donald Tsang as saying. The Hong Kong government has come under fire for doing too little, too slowly to address unemployment, which has risen to a record 5.8 percent, plunging property values, and falling retail sales. The IMF commended the government's resolve to hold fast its 15-year peg linking the Hong Kong dollar at a stable rate to the U.S. dollar, saying the fixed exchange rate ''contributed significantly to financial stability.'' But the IMF directors stopped short of a granting a ringing endorsement of the Hong Kong government's decision last year to intervene in local markets to dislodge speculators. In a two-week period in August, the government spent the equivalent of $15.1 billion to buy shares in all 33 stocks that make up the blue-chip Hang Seng Index. The holdings included stakes of more than 10 percent in three big companies. The government later introduced a series of regulations to restrict speculative activity and stabilize the markets. The Hong Kong government ''should refrain form further intervention in equity markets ...'' the report said. mercurycenter.com