Hong Kong GDP growth to dip in 2025 amidst trade tensions, high rates

It will decline to 2% from 2.6% in 2024, Deutsche Bank said.

Hong Kong's GDP growth is expected to slow to 2% in 2025, down from 2.6% in 2024, due to high interest rates and external challenges like US-China trade tensions.

In a report "Asia's Roadmap to Trump 2.025," Deutsche Bank noted key risks, such as possible US tariff hikes on Chinese goods, a stronger USD reducing Hong Kong's competitiveness, and further US-China economic separation.

For domestic, it noted a decline in visitors and changing consumer habits as challenges for growth.

Whilst Hong Kong's financial sector shows some signs of recovery, sustained improvement will depend on a stronger Chinese economy.

The stock market rallied in September and October following China's stimulus announcements, with IPO and refinancing activity also picking up.

“The outlook for the financial sector remains contingent on the performance of the Chinese economy, particularly its property sector, and the evolving dynamics of US-China relations,” Deutsche Bank said.

Despite these uncertainties, the firm expects Hong Kong’s fiscal policy to stay supportive, with substantial reserves and increased financing likely to help the economy.