HK economy expects to see solid growth for Q1 2025, says Paul Chan

Hong Kong’s economy is expected to see solid growth for the first quarter this year, according to the city's finance chief Paul Chan, who pledged to control government spending to maintain the city's competitiveness. 

According to his Sunday blog, Chan said on 27 April that the local economy had benefited from the surge in arrivals and exports between January and March, but there are still uncertainties in the global outlook due to the US-China trade war, highlighting a need for government spending control. 

Chan pointed out that the number of visitors to Hong Kong increased by 9% in the first quarter of this year to 12.2 million thanks to a series of mega events and international conferences. Among them, non-mainland visitors accounted for approximately 2.98 million, a YoY increase of 18%, and the growth rate of mainland visitors to Hong Kong also reached 6%.

On the trade front, Chan added that merchandise exports in the first quarter accelerated, especially to key markets such as mainland China, ASEAN, and the US.

With the Labour Day Golden Week holiday, Chan projected that approximately 840,000 mainland visitors would arrive in Hong Kong. This figure represents a roughly 10% increase compared to last year's Golden Week and a 13% increase relative to this year's Spring Festival daily averages.

Chan added that the recovery of the tourism industry has given a significant boost to service output and consumer markets. Seasonally adjusted retail sales in January and February recorded month-over-month growth.

However, Chan said that the escalating global trade tensions and volatility in financial markets pose substantial risks. "Looking ahead, the bullying practices and unilateralism of the United States will continue to cast a shadow over the global economic outlook."

"As a small, export-dependent economy, Hong Kong remains highly vulnerable to external pressures," Chan said. "Nevertheless, the government is implementing measures to support businesses, drive innovation, and modernise traditional industries to ensure high-quality growth."

"Beyond achieving economic growth, we must also firmly advance the fiscal consolidation programme to ensure fiscal prudence and the sustainability of public finance," he added.

Back in February's budget, Chan introduced several measures to tighten the authorities' spending, including strict control of government expenditure growth, consolidation and optimal utilisation of public financial resources, enhancement of public service efficiency, and revenue generation to achieve fiscal balance.

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