International Monetary Fund: Hong Kong economy is gradually recovering

Hong Kong, December 3 (Xinhua) The International Monetary Fund (IMF) announced on 3rd that the Hong Kong economy is recovering steadily, and that the unemployment rate is expected to drop in the coming months, with inflation close to 0 next year, and to support Hong Kong's linked exchange rate system.　　The International Monetary Fund (IMF) acknowledges the measures taken by the HKSAR Government to promote economic recovery and endorses the increase in the cap on deposit protection, and commends Hong Kong for taking steps to co-ordinate the withdrawal of the hundred-percent deposit guarantee arrangement with Singapore and Malaysia.　　With the pace of recovery faster than expected, asset prices rising and financial markets improving, the fund expects that Hong Kong's fiscal deficit this year is likely to be much lower than expected. The International Monetary Fund is of the view that the Hong Kong financial system has been successful in resisting the recession and is confident that Hong Kong banks will be able to cope with the pressure on profits in the coming months as a result of increased provisioning and narrowing spreads.