Exclusive | Hong Kong central banker Eddie Yue says domestic consumption can drive economic growth, counter high borrowing costs
- The recent relaxation of Covid-19 rules could help boost domestic consumption, which has been suppressed in the past year, Yue says
- HKMA CEO expects banks’ bad-debt ratios will rise but will be ‘manageable’
Hong Kong’s retail consumption is likely to pick up in the coming months as easier social-distancing rules open the way for business and leisure travel to resume, delivering a much-needed boost to help the services-dependent economy offset the pain of rising borrowing costs, the city’s de facto central banker said.
“Because the monetary policy in Hong Kong is not to be used for purposes other than exchange-rate stability, that means if the government needs to provide some support to the economy, or some support to individual sectors of the economy, like SMEs [small and medium-sized enterprises], then it will have to use fiscal policy,” Eddie Yue Wai-man, the HKMA’s CEO, said in an interview with the Post.
“It is either in terms of investing in infrastructure, or like what the Hong Kong government did in the past few years – by giving out consumption vouchers.”
