Agencies and Lainey Liu

Hong Kong's economic growth slowed in 2024 as stagnant consumption and a lackluster property sector weighed on activity, but the government said it was optimistic for growth this year despite heightened uncertainties.

Gross domestic product rose at a 2.5 percent annual pace last year, according to advance estimates from the Census and Statistics Department yesterday, slowing from 3.3 percent in 2023 and matching the government's forecast.

Growth picked up to 2.4 percent in the fourth quarter, from an upwardly revised 1.9 percent in the prior three-month period.

The result slightly outperformed economists' estimate of a 2.3 percent increase.

On a seasonally adjusted quarter-to-quarter comparison basis, the GDP increased by 0.8 percent in real terms in the fourth quarter of 2024 when compared with the third quarter.

Private consumption expenditure fell by 0.2 percent in the fourth quarter from a year earlier, from a decrease of 1.3 percent in the third quarter. For 2024, the PCE fell by 0.6 percent in real terms from 2023.

A government spokesman said that Hong Kong's economy is projected to register further growth in 2025 despite heightened uncertainties in the external environment.

"Trade protectionist policies implemented by the United States may disrupt global trade flows and adversely affect Hong Kong's goods exports. They may also lead to a slower pace of interest rate cuts in the US and keep the Hong Kong dollar strong for longer," the spokesman said.

The spokesman said the mainland's proactive policy to boost its economy will help bolster market confidence and benefit a wide spectrum of economic segments in Hong Kong.

The central government's various measures benefitting Hong Kong, coupled with the city's range of initiatives to promote economic growth, will also provide support to various economic activities, he said.

Hang Seng Bank (0011) chief economist Thomas Shik Chun-sing said the acceleration of growth in the last quarter reflected the continued recovery of the tourism industry and the resilience of external trade.

The external environment is becoming increasingly complex this year, but the stabilization of the mainland economy, policy support from the mainland and Hong Kong governments, and the downward trend in global interest rates will be factors conducive to Hong Kong's economic development, he said.

He expects Hong Kong's economy to continue to recover, with GDP in 2025 also similar to last year's 2.5 percent.

Hong Kong’s housing market has remained lackluster. REUTERS

HK economy to grow in 2025 despite headwinds