HONG KONG (AP) - Analysts believe Hong Kong has emerged from the recession it slipped into during the SARS epidemic, and ordinary people are starting to voice optimism after months of gloom.
Unemployment has fallen, though it remains stubbornly high at 8 percent, and Hong Kong has now weathered five years of deflation - falling prices due to slow demand.
Economists predict the latest Hong Kong GDP figures - set for release Friday afternoon after the stock market closes - will show the territory has emerged from recession in the July-September quarter, after falling into it during the April-June period.
Hong Kong was in crisis then, with most citizens wearing surgical masks around town, and the World Health Organization warning travelers to stay away.
But soon after the travel warning was lifted in May, Hong Kong began rebounding _ and it still is.
"More people are taking taxis now and they are more willing to spend money than during SARS,'' said trading firm owner Liu Kin-yan, 50.
"I hope the economy will continue to improve next year.''
Liu said his main worry is public discontent with Hong Kong's government, led by unpopular Chief Executive Tung Chee-hwa.
"The government is doing a lousy job, and it can't instill confidence in the public,'' Liu said.
But mainland Chinese tourists are returning to Hong Kong, leading to recovery for airlines, hotels and restaurants that took a beating during the SARS outbreak. Growth in exports is also helping.
Private economists surveyed by Dow Jones Newswires predicted a median 2.7 percent surge in growth for the third quarter, compared with the same period in 2002.
They forecast 2.4 percent growth for the full year.
Locals interviewed Friday by The Associated Press agreed things are looking up.
"The economy is in better shape than when we were hit by SARS,'' said Irene Leung, 33, who works for a freight company.
"I think the outlook is good. China is opening up its market, and Hong Kong can capitalize on China's growth.''
The outbreak of severe acute respiratory syndrome infected 1,755 people here and killed 299. - AP