Hong Kong’s economic growth decelerated to 2.5% in 2024, down from 3.2% in 2023. The slowdown was primarily due to weakened exports and reduced consumer spending. Experts suggest this reflects global economic uncertainties and challenges in the local market.
In the third quarter, the economy expanded by 1.8% year-on-year, a decline from the 3.2% growth observed in the second quarter. This trend continued into the fourth quarter, with a modest 2.4% increase, slightly surpassing the forecasted 2.3%. Analysts noted that while the quarterly growth was positive, it fell short of the government’s earlier projections.
The government revised its 2024 growth forecast to 2.5%, adjusting from the earlier range of 2.5%-3.5%. To counteract the economic downturn, authorities implemented measures such as reducing the spirits tax from 100% to 10% on certain imports, aiming to revitalize the nightlife and boost the economy. Officials believe this policy shift could enhance tourism and consumer spending.
Despite these efforts, challenges persist, including a downturn in the property market and ongoing global economic uncertainties. The city’s real estate sector, a significant contributor to GDP, faced declining investments and lower transaction volumes. Property prices saw minimal growth, reflecting cautious investor sentiment.
The government remains cautiously optimistic, anticipating continued growth in 2025 while acknowledging potential disruptions from international trade tensions. Economic planners emphasize the need for diversified growth strategies, including investment in technology and green industries. The administration has pledged to support small and medium enterprises to foster innovation and resilience.
Experts suggest that maintaining financial stability is crucial for sustaining growth. The city’s financial sector continues to attract international investors, but risks remain from global market fluctuations. Economists advise monitoring external factors, such as interest rate changes and geopolitical developments, which could impact Hong Kong’s economic outlook.
Consumer confidence has been a mixed factor, with some recovery in retail sales but lingering caution among households. Employment rates have remained stable, yet wage growth has been modest. Analysts recommend targeted stimulus measures to boost disposable income and spending power among residents.
Trade remains a critical area of focus, with policymakers aiming to strengthen ties with regional partners. Recent agreements aim to facilitate smoother cross-border commerce and attract foreign direct investment. Officials argue that enhancing trade relations is essential for sustaining long-term economic growth.
Overall, while Hong Kong faces a challenging economic landscape, strategic initiatives and policy adjustments aim to stabilize and reinvigorate growth. Authorities emphasize the importance of adaptability in navigating global uncertainties. Looking ahead, the government plans to assess and adjust economic policies to align with emerging trends and challenges.
