A report by Pacific Economic Cooperation Council (PECC) predicted a modest economic slowdown for Hong Kong in 2007.

Based on forecasts by a panel of experts from Asia Pacific, the State of the Region report projects a real GDP growth of Hong Kong at 5.1 per cent next year, a slight decrease than its predicted growth of 6.3 per cent this year.

The report also sees a drop in percentage for export and import growths of 0.5 and 0.4 per cent respectively this year.

Hong Kong is not the only economy to face slowdown next year. PECC forecasts real GDP growth for the whole Asia Pacific at 4.3 per cent in 2007, lower than the predicted 5 per cent this year.

East Asia will have a decline in real GDP growth from 6.2 per cent in 2006 to 5.8 per cent in 2007.

Woo Yuen-pau, president of the Asia Pacific Foundation of Canada and coordinator of the report said the slowdown for Hong Kong and the whole Asia Pacific was mainly due to an economic slowdown in the United States, caused by rising oil prices and inflation over the last two years.

Despite the expected modest economic slowdown, PECC was not pessimistic about Hong Kong's future, said Woo. The slowdown for the whole region had been anticipated, and the overall growth in the region remains healthy, especially in East Asia, he said.

"Asia will be the region that enjoys the most dynamic economic growth in global economy," he concluded.

Among the Asian economies, the Chinese mainland is the only economy that PECC expects to see a double-digit growth in real GDP at 10.5 per cent for this year and 10 per cent for next year.

"Hong Kong has a respectable economic performance and long-term growth," said Elley Mao, Principal Economist, Economic Analysis and Business Facilitation Unit of Financial Secretary's Office who was the guest at the press conference.

"We should not lose sight of the fact that Hong Kong's economy is externally-oriented, affected not just by mainland but also the rest of the world," she said. "Hong Kong will benefit from mainland's robust growth and the government is confident about Hong Kong's future."

The forecasts made by PECC are in line with the survey results on Asia Pacific's economic outlook conducted by PECC.

A total of 370 leaders from government, business, academic, media and NGO were polled. The majority of respondents believe that Chinese economy would improve in the short term of one to two years (64 per cent) and medium term of three to five years (72 per cent).

The survey also raised questions about the effectiveness of Asia Pacific Economic Cooperation (APEC). Only 42 per cent of them agreed that "APEC is as important today as it was in 1989" (the year it was established), with "weak commitment from member economies" and "lack of focus" as major challenges facing the APEC.

On the viability of APEC, Woo said APEC was not losing its importance in the region because the depth of trans-Pacific economic cooperation continued to increase.

He said APEC as an institution needed to reform its structure to commensurate with the diversity and depth of its programmes and it should strengthen its Secretariat.

Founded in 1980 with 26 member committees, PECC is an independent non-government organization that promotes cooperation and dialogue in the Asia Pacific.