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HK business activity picks up
HONG KONG, China -- A new survey shows that Hong Kong's economy expanded for the first time in seven months in February. But British research firm NTC Research said Monday that any expansion was only marginal, suggesting that business conditions remain relatively stagnant, Reuters news agency reported. Hong Kong reported a rare trade surplus in January, thanks to robust growth in re-exports. Regional analyst IFR Asia Pacific said in a commentary Monday that this reflected buoyant trade flows with the Chinese mainland. Local demand in Hong Kong remains weak and there are few signs of an upturn, according to IFR. But NTC Research said in its monthly Purchasing Managers' Index survey that business activity, new orders, inventories of raw materials and employment had all grown at modest rates during February. The Hong Kong PMI, which gives an overall view of local business activities, rose to 50.4 from 49.6 in January. A figure above 50 indicates economic expansion. Hong Kong narrowly avoided falling into its second recession in four years last year, with bank HSBC estimating that GDP grew 2.0 percent in 2002. It is forecasting growth of just 1.6 percent in 2003. Hong Kong will release its fourth-quarter GDP data on Wednesday, the same day Hong Kong's Financial Secretary Anthony Leung will deliver his 2003-04 budget speech. Strong growth in exports over the past seven months has given a mild boost to the economy, but consumer and business confidence remain weak after being ravaged by more than four years of deflation. The government's fiscal deficit, now running at about 6 percent of gross domestic product, is also hampering its ability to stimulate the economy. "The boom in entrepot trade with China is clearly providing a significant boost to the territory's economy as domestic activity remains anemic," IFR said Monday. Reuters contributed to this report.
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