IMF Warns on Hong Kong Property
Author: Chester Yung; Alex Frangos</br></br>HONG KONG--The International Monetary Fund warned Thursday it sees increasing risks of a property bubble in Hong Kong due to continued liquidity inflows and rock-bottom interest rates coupled with tight housing supply, and it urged the city's government to take further measures to rein in the booming real-estate market if asset-price inflation continues.</br></br>The IMF said in its annual review of the Hong Kong economy that while the city has returned to robust growth, it sees rising inflationary pressures fueled in large part by soaring property prices and a stronger Chinese yuan.</br></br>"These pricing pressures will become increasingly visible in the coming months with inflation expected to reach around 5% by end-2011," the IMF said in its review.</br></br>The organization said it expects Hong Kong's gross domestic product to expand 6.75% this year, with growth moderating to 5%-5.5% in 2011.