Economy still slated for 2.5% growth with resilient external trade

Hang Seng Bank predicts 2.5% expansion of economy in 2025.

Hong Kong’s economy is still projected to grow by 2.5% in 2025 with resilient external trade but sluggish private consumption, said Hang Seng Bank Economic Research on Thursday.

Hong Kong’s GDP increased 3.1% year on year (YoY) in Q1.

Despite reciprocal tariffs imposed by the US in April, total exports still rose 15% year-on-year (YoY), thanks to the strong growth from mainland China and Southeast Asian countries.

The external environment remains challenging as tariffs slowed down the exports to the US. Increasing reluctance of foreign countries in absorbing additional supply from Hong Kong also made export growth uncertain.

Exports to the US expanded by just 1% on an annual basis in April, and 3% in the first four months of the year. This is in contrast to the 9% expansion in 2024.

Hong Kong’s trade resilience lies in its exports to other major economies, including mainland China and the ASEAN region. Exports to the mainland and ASEAN rose by 23% and 25%, respectively, in April alone.

Private consumption fell 1.1% YoY in Q1 2025, recording a negative growth for four consecutive quarters, the longest period since 2020.

Although wages continued to grow, falling asset prices and economic uncertainty caused a 11% decline in commodity consumption.

However, Hang Seng Bank maintained the projection of 2.5% expansion in Hong Kong’s economy for 2025 despite the uncertainties, believing that high net fund inflows and lower interest rates will support consumption and economic growth.