Hong Kong's economy is expected to slow to 2.7 percent next year, with the jobless rate rising to 3.9 percent, amid uncertainties, according to the Hong Kong General Chamber of Commerce.
HKGCC said that the economy is confronted with a combination of strengths and vulnerabilities as factors such as sluggish global growth, heightened geopolitical risks, and the competition in AI will continue to reshape markets.
Fung Hoi-wing, Economist at the HKGCC, said that despite the temporary truce in the US-China trade tensions, the outlook for AI-related components and chip trade remains uncertain, posing challenges to Hong Kong's exports, with the prediction of merchandise exports growth will decrease to 3 percent next year.
Fung said that even though the retail sector has recently seen accelerated growth, it remains uncertain whether this trend can be sustained.
Moreover, the retail industry is precisely one of the sectors where the unemployed population is most heavily concentrated, with the retail sales growth projected to be 2 percent next year, compared to 0.8 percent this year.
Fung added that as companies are accelerating the adoption of AI, existing jobs will be replaced, particularly entry-level positions, which also lead to the increase of joblessness.
Hong Kong's GDP is expected to increase to 3.2 percent, while the unemployment rate is expected to be 3.7 percent by the end of this year. According to the latest labor force statistics released in November by the Census and Statistics Department, the seasonally adjusted unemployment rate declined from 3.9 percent during July to September 2025 to 3.8 percent between August and October 2025.
Additionally, she pointed out that the recent interest rate cut by the US Federal Reserve System is favorable for Hong Kong's investment and real estate markets. But the pace of future rate cuts remains uncertain due to ongoing internal disagreements and may not accelerate until after the Federal Reserve chair is replaced.
HKGCC conducted the latest Business Prospects Survey. According to the survey, nearly half of the surveyed companies expect steady economic expansion next year, a significant increase from 18.3 percent last year, driven by factors such as the suspension of US-China tariffs and advancements in the Israeli-Palestinian peace talks, said HKGCC.
