Hong Kong’s economy grew by only 2.5% in 2024, down from 3.2% the year before. The government warned that next year could be tough. After restrictions were lifted following the pandemic, people began spending more, but many residents are now heading to nearby Shenzhen for shopping. They prefer its cheaper groceries, fun activities, and even healthcare services.
Private spending in Hong Kong fell by 0.6% compared to last year. Even though other important parts of the economy grew, the drop in spending is a concern. Financial Secretary Paul Chan had hoped for growth up to 3.5%, but he lowered his prediction to 2.5% in November.
Despite challenges, the government believes Hong Kong’s economy can still grow in 2025, even with uncertainties worldwide. Recently, US President Donald Trump announced new tariffs on China, which could hurt global trade and impact Hong Kong.
“Trade policies from the US could make it harder for us to sell goods,” said a government spokesperson. “This might also affect interest rates in the US and keep our currency strong for a longer time.”
While there are challenges, there is hope that support from Beijing can help boost the local economy. High interest rates are making it hard for people to spend money because it costs more to borrow. The government might need to cut its spending too, as it is projected to face a deficit of almost HK$100 billion for the third straight year.
In 2024, government spending rose by 0.9%. Exports of goods increased by 4.7% while services grew by 4.8% due to more people visiting and better demand. Imports also went up but at slightly slower rates.
Leave a Reply