HK Inflation Relief Plan Limited Boost To Econ-MS

Forex News Morgan Stanley says HK government's HK$11 billion inflation relief package announced Wednesday, is equivalent to 0.7% of GDP spread over 2 years, "therefore will be a limited boost to economic growth or additional inflationary pressure". Notes HK fiscal reserves total HK$487 billion end of May, equivalent to 30% of GDP. "This comfortable buffer offers the government considerable fiscal flexibility in managing in the economy," report says. Keeps CPI inflation forecast at 4.5% for 2008, higher than government forecast of 3.4%. Adds mid-single-digit inflation is still moderate by international and historical standards.