Hong Kong’s Economy Grows 3.1% in Q2 2025
Hong Kong’s economy has expanded by 3.1% year-on-year in the second quarter of 2025, surpassing the 3% growth recorded in the first quarter. This marks the tenth consecutive quarter of economic growth, according to the Census and Statistics Department’s advance estimates.
Economic Performance by Sector
The growth of Hong Kong’s economy was a result of positive indicators in several sectors, including:
Private Consumption
Private consumption expenditure increased by 1.9% in real terms compared to the same period last year. This rebound follows a 1.2% decline in the first quarter, indicating a recovery in domestic demand.
Government Consumption
Due to the continued public sector spending, government consumption expenditure rose by 2.5% year-on-year.
Investment Activity
Similarly, gross domestic fixed capital formation grew by 2.9%, suggesting a steady pace of investment in infrastructure and business expansion.
How the Trade Dynamics Look
Regarding trade, here’s more on exports and imports:
Exports of Goods
In the current quarter, exports of goods experienced a significant increase of 11.5%, up from 8.4% in the first quarter. This acceleration is attributed to resilient external demand and a temporary easing of U.S. tariff measures, which led to a surge in shipments.
Imports of Goods
Imports of goods also grew by 12.7%. This is higher than the 7.2% increase in the previous quarter.
Exports of Services
Exports of services rose by 7.5%. This was mainly due to a strong growth in inbound tourism, cross-border traffic, and financial and business sectors amid a buoyant local stock market.
Imports of Services
Imports of services increased by 7%, reflecting the city’s growing demand for international services.
How is the Outlook for the Rest of 2025
As of now, the Hong Kong government maintains its full-year GDP growth forecast at 2% to 3%. Still, external uncertainties persist even if the economy has shown resilience. The recent U.S. tariff hikes and the uncertain pace of interest rate cuts may impact global trade flows and investment sentiment. Additionally, the “rush shipment” effect is expected to diminish later this year.
The government’s economic performance will depend on how the above factors evolve. Either way, for those looking to start a business in Hong Kong, due diligence and professional assistance can be essential.
