Bank of East Asia foresees ‘moderate’ economic growth in Hong Kong for 2025

Home prices are slated to recover by around 5% in 2025, BEA’s chief economist said.

The Bank of East Asia (BEA) expects the mainland China and Hong Kong economies to register “moderate” growth in 2025, amidst risks that will weigh on interest rates.

The Hong Kong-based bank expects Hong Kong’s economy to grow 2.5% for the whole year, whilst the mainland China’s economy is expected to grow by 4.8%.

“The Chinese mainland economy is on track to achieve its growth target of around 5% in 2024,” said Ricky Choi, BEA’s chief economist, in a media briefing in December 2024.

“Even in the face of Donald Trump’s second presidency, we believe the mainland authorities possess abundant policy tools to ensure steady growth in 2025,” Choi added.

For Hong Kong, strong demand for merchandising trade lifted its economy to a 2.6% growth in 2024. This offset the impact of high interest rates, property market consolidation, and anaemic consumption, Choi said.

“Looking ahead, increased policy support from the mainland will bring positive spillover effects to Hong Kong, injecting impetus into the Hong Kong economy and its asset markets,” he added.

Choi said that further rate cuts are on the horizon, as well as the relaxation of all demand management and prudent mortgage regulation measures. These will help Hong Kong’s home prices to recover by around 5% in 2025.