Hong Kong’s economy expanded 3.5 per cent on-year in 2025, according to preliminary government figures released on Friday, beating estimates and marking an acceleration on the third consecutive year of expansion.
Robust trade figures and an increase in investment contributed to Friday’s figure, which is higher than the government’s growth goal for the year and beat a Bloomberg projection of 3.2 per cent.
The financial hub’s good performance came despite what a government statement called “external uncertainties… given escalating geopolitical tensions”.
“Sustained moderate expansion of the global economy, coupled with persistently strong global demand for artificial intelligence-enabled electronic-related products, will lend support to Hong Kong’s export performance,” the statement said.
The demand for electronic-related products, as well as “buoyant regional trade flows in Asia”, saw last year’s total exports of goods increase by 12 per cent over 2024, it added.
Imports of goods rose 12.6 per cent compared to 2024, while exports of services rose 6.3 per cent, supported by sustained growth in inbound tourism and cross-border financial activities.
Meanwhile, capital inflows to Hong Kong’s stock exchange made it one of the world’s most active financial markets in 2025.
Both the capital and property markets saw increases in price and volume in the city last year, officials said.
Personal consumption was up 1.6 per cent on-year.
The Consumer Price Index (CPI) rose 1.4 per cent, according to data released last week, with the government estimating inflation would stay modest in the near term.
– ‘Protectionist headwinds’ –
Hong Kong has its own trade policies as a special administrative region of China, but is still vulnerable to floating US tariffs due to its significant re-exporting of Chinese goods.
The government expects the city’s economy to maintain “good momentum” this year.
Standard Chartered Bank said in its outlook that Hong Kong’s exports of goods was “likely to decelerate” this year thanks to the payback effects from front-loading activities.
Hong Kong, an entrepot for China, has benefitted from Beijing playing “the exports strategy really well” in 2025, said Kelvin Lam, an economist at Pantheon Macroeconomics.
China managed to cultivate and open alternative markets for goods supposedly destined for the United States, he told AFP.
However, China’s export growth “will face increasing headwinds for its existing strategy, as the non-US new markets start carrying out their own protectionist measures to protect local industries,” Lam added.
He said, “The protectionist headwinds will exert pressure on Hong Kong”.
Financial Secretary Paul Chan warned in an article earlier this month that “the geopolitical landscape is not only changing global asset allocation strategies, but also fundamentally reshaping global trade patterns”.
The city “must accelerate the upgrading and transformation” of its trade ecosystem, he said.
AFP
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