LOOMING TARIFFS
The government said it expected Hong Kong’s economy to grow in 2025 “despite heightened uncertainties in the external environment”.
US President Donald Trump announced on Saturday 10 per cent tariffs against China, sparking fears of trade wars that could pummel the global economy.
“Trade protectionist policies implemented by the United States may disrupt global trade flows and adversely affect Hong Kong’s goods exports,” the Hong Kong government spokesperson warned.
“They may also lead to a slower pace of interest rate cuts in the US and keep the Hong Kong dollar strong for longer.”
However, Hong Kong’s economy would benefit from Beijing’s efforts to stimulate growth and bolster market confidence, he said.
The Chinese finance hub had been strained by the high interest rate environment because its currency is pegged to the greenback, with heightened borrowing costs holding back consumption and investment.
Hong Kong’s government is also facing pressure to cut its spending, with it on course to log a deficit of nearly HK$100 billion (US$12.8 billion) – the third consecutive year of deficit.
Government consumption as a component of GDP increased by 0.9 per cent in 2024.
Exports of goods and services rose by 4.7 and 4.8 per cent respectively over that period, with the government citing “improved external demand” for goods and more visitor arrivals.
Imports of goods and services rose by 2.3 per cent and 11.8 per cent respectively.
