Outlook for 2011-15

• Healthy economic growth will contribute to political stability, but opposition parties will continue to maintain pressure for democratic reform as well as healthcare reform, stronger environmental policy and anti-poverty measures.
• Elections for a new chief executive and the Legislative Council (Legco, the territory's parliament) will be held in 2012. The pro-democracy camp is expected to strengthen its presence in the legislature.
• The territory posted real GDP growth of 6.8% in 2010. Growth will slow to an annual average of 4.7% in 2011-15, amid a more subdued outlook for exports.
• Hong Kong's fiscal position remains strong. The Economist Intelligence Unit forecasts that the budget will stay in surplus throughout 2011-15, at an average of 2.4% of GDP.
• In spite of a relatively weak external environment, Hong Kong will post large current account surpluses in the forecast period, with a widening goods trade deficit being offset by steady growth in the surplus on traded services.

Monthly review

• The government has proposed doing away with Legco by-elections, in an effort to prevent a repeat of the tactic used last year by opposition parties in which they triggered by-elections to protest against government policies.
• The government has awarded the MTR Corporation (the railway company managing two large rail projects) the property-development rights to two sites as a way of subsidising the projects.
• The Hong Kong Monetary Authority fears a liquidity squeeze as a result of a growing share of renminbi-denominated deposits in the local banking system and a reversal of capital inflows when US interest rates rise.
• Hong Kong took joint first place with the US in the 2011 World Competitiveness Rankings, a survey of 59 economies compiled by the Swiss-based International Institute for Management Development.
• The Hong Kong economy reported real GDP growth of 7.2% year on year in the first quarter of 2011, following an expansion of 6.8% in 2010
• Visitor arrivals have continued to boom. Arrivals in the territory were up by 13.9% year on year in March, to 3.2m, boosted by a 21.6% increase in arrivals from mainland China.