Economic Situation in 2025
6. The global political and economic landscape is fraught with complication and volatility. The United States (US) waged a tariff war early last year, precipitating a sharp escalation in global trade tensions. As the US reached preliminary trade agreements with various economies and achieved consensus with China on key economic and trade matters, trade frictions eased, allowing the global economy to continue expanding.
7. Technological transformation and the rapid development of artificial intelligence (AI) have spurred a fresh wave of investment enthusiasm and driven product demand. Asia, especially China, serves as an important engine propelling global economic growth. Furthermore, the resumption of interest rate cuts by the US since September last year has bolstered performance of the investment and capital markets. The International Monetary Fund (IMF) projects global economic growth of 3.3 per cent for 2025, which is broadly in line with that of 2024.
8. Hong Kong's economy was buoyant last year. External trade remained strong, private consumption rebounded, and fixed investment accelerated. The overall economy grew by 3.5 per cent in the year, marking the third consecutive year of expansion.
9. Boosted by robust demand for electronic‑related products, total exports of goods from Hong Kong grew by 12 per cent in real terms, with particularly notable increases in exports to the Chinese Mainland and the Association of Southeast Asian Nations (ASEAN).
10. Exports of services rose by 6.3 per cent. Visitor arrivals surged by 12 per cent, while cross‑boundary financial services and traffic saw sustained growth.
11. On domestic demand, private consumption expenditure rose by 1.7 per cent for the year, reversing the downward trend from the second quarter of 2025. Amid continuing economic expansion and a recovering residential property market, growth in overall investment expenditure accelerated to 4.3 per cent.
12. The labour market gradually stabilised in the latter half of the year. The seasonally adjusted unemployment rate stood at 3.8 per cent in the fourth quarter. Employment earnings showed sustained growth, with the median monthly employment earnings of full‑time employees increasing by 4.2 per cent year‑on‑year in the fourth quarter.
13. Inflation remained mild. Netting out the effects of the Government's one‑off measures, the underlying inflation rate was 1.1 per cent last year.
14. The stock market delivered a stellar performance. The Hang Seng Index rose by 28 per cent over the year. The daily turnover surged by 90 per cent to a historic high of close to $250 billion. Capital raised through initial public offerings (IPOs) exceeded 2024 by more than two times to over $280 billion, ranking first globally.
15. The residential property market saw increases in both prices and transaction volumes. Market activities have been active since last March, with total transactions reaching a four‑year high of nearly 63 000 for the year. Property prices rose by 3.3 per cent for the year, ending a three-year decline, while rental prices rose by 4.3 per cent in the year. Transaction volume for non‑residential properties rebounded, while the declines in rentals and prices narrowed.
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