Hong Kong’s economic growth slowed to 2.5% in 2024 as more residents opted to spend outside the city, the government reported on Monday, cautioning that the coming year would bring “heightened uncertainties.”
The city, a key financial hub, experienced a post-pandemic recovery in 2023 following the reopening of international business and travel. However, the momentum weakened as China’s broader economic slowdown intensified.
“Private consumption expenditure saw a slight decline due to changes in residents’ spending habits,” a government spokesperson stated.
With cross-border travel resuming, more Hong Kong residents are choosing to shop, seek entertainment, and even access healthcare in nearby Shenzhen, where costs are lower.
Private consumption fell by 0.6% year-on-year, while other key GDP components registered growth.
At the start of 2024, Financial Secretary Paul Chan projected GDP growth of up to 3.5%, but he revised this estimate to 2.5% in November.
Despite external uncertainties, the government remains optimistic about economic growth in 2025.
Concerns over global trade have risen after U.S. President Donald Trump announced a 10% tariff on China over the weekend, raising fears of trade disputes that could impact the global economy.
“Hong Kong’s exports could be negatively affected by U.S. trade protectionist policies, which may disrupt global trade flows,” a government spokesperson warned.
Such measures could also slow down interest rate cuts in the U.S., keeping the Hong Kong dollar strong for an extended period.
However, Hong Kong may benefit from Beijing’s efforts to stimulate economic growth and boost market confidence.
The city’s economy has been strained by high interest rates due to its currency being pegged to the U.S. dollar, leading to increased borrowing costs that have dampened consumption and investment.
Additionally, the government is under pressure to reduce spending, as it faces a third consecutive budget deficit, expected to reach nearly HK$100 billion.
Government spending, a component of GDP, rose by 0.9% in 2024.
Meanwhile, exports of goods and services grew by 4.7% and 4.8%, respectively, driven by improved external demand and increased visitor arrivals.
Imports of goods and services increased by 2.3% and 11.8%, respectively.
