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Sustaining Momentum and Accelerating Development
Hong Kong’s economy has continued to improve so far this year, with real gross domestic product (GDP) recording year-on-year growth for 11 consecutive quarters. In the third quarter of this year, real GDP growth picked up to 3.8% year-on-year, marking the strongest performance in over a year and a half. The three major components of the economy — exports, consumption and investment — have all continued to perform well. With interest rates trending downward and China-US trade tensions slightly easing, we are cautiously optimistic about the economic performance in the fourth quarter. As such, we have revised the economic growth forecast for 2025 as a whole upward to 3.2%, higher than the previous forecast of 2% to 3%. This would mark the third consecutive year of post-pandemic GDP growth.
Looking back at the first half of this year, despite significant pressure and uncertainties in the external environment — with the new US administration taking office and imposing unilateral tariffs globally — we remained committed to our free port policy, responding to challenges with coherent, consistent and predictable policies. With steadfast support from the Central Government and the joint efforts of the HKSAR Government and various sectors, we have made notable positive progress.
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Take external trade as an example: Hong Kong’s exports of goods saw a notable year-on-year increase of 11.3% in real terms in the first three quarters. Within which, exports to the Chinese Mainland and ASEAN were particularly robust, rising by 14.6% and 27.1% respectively in volume terms. This reflects not only favourable regional developments but also the fruits from years of solid work, including forging relationships with new trading partners, actively supporting Mainland enterprises in going global, and strengthening Hong Kong’s function as a two-way platform. Hong Kong has emerged as a key node in the increasingly integrated economic and trade networks of the Asia-Pacific region.
In the broader context of global trade flow and supply chain restructuring, Asia — especially the Chinese Mainland and ASEAN as the world’s major production bases for diverse products and raw materials — has demonstrated a high level of resilience, competitiveness and complementarity amid the tariff war. Meanwhile, the surge in global investment in artificial intelligence (AI) has created strong demand for advanced technology products, which has further boosted regional exports. Looking ahead, the new phase of “AI+” development is expected to spur innovation in product and service design and applications, stimulate robust demand for electronic consumer goods and open up new growth potential for future export trade.
Hong Kong’s economic growth in the last quarter was driven not only by accelerated growth in exports but also supported by continued increases in fixed investment and domestic consumption. Continued capital inflows, a buoyant stock market, and a stabilising property market have all lifted market expectations for our economic outlook.
In recent years, we have implemented a series of financial market reforms, including optimising the listing regime, enhancing market liquidity, and actively attracting capital, family offices and high-value-added investors to establish a presence in Hong Kong. Our unique advantages under the "one country, two systems" framework have made Hong Kong a safe harbour for attracting international capital amid a complicated global geopolitical and economic landscape. Many investors also hope to use Hong Kong as a base to better seize opportunities from our country’s steady economic progress as well as rapid innovation and technology development.
This year, stock trading, IPO activities, and the refinancing market have all been very active. The Hang Seng Index has surged by over 30% so far this year, with the average daily turnover in the first 10 months reaching HK$258 billion — nearly double the full-year average for 2024. During the same period, 81 companies went public, raising nearly HK$216 billion in IPO proceeds — more than double year-on-year, ranking first globally. Furthermore, follow-on fundraising by listed companies reached HK$475 billion in the first 10 months. Moreover, since 2022, InvestHK has helped over 200 family offices to set up or expand in Hong Kong. At the end of last year, Hong Kong's total assets under management exceeded HK$35 trillion, representing a year-on-year increase of 13%. These positive developments have led Hong Kong’s financial services exports to increase by 11% in real terms in this year so far, contributing over 10% of GDP growth during the same period.
With a thriving local economy and financial markets, as well as the interest rate cuts by the US Federal Reserve since September, local property market sentiment has turned positive. Residential property prices rose by 1% during the second quarter and another 2% during the third quarter, marking two consecutive quarters of increases. Flat prices have reverted to an increase of 1.1% so far this year. Rentals stayed solid, rising by 3.9% so far this year. Transactions in October remained active (about 5,700 cases), staying above the five-year average for eight consecutive months.
As for the non-residential property market, while prices and rentals are still relatively soft, transactions have increased compared to a year ago. Recently, some companies have purchased multiple floors of office space or even entire office building blocks in Hong Kong, and some foreign financial institutions have increased their leasing of Grade A office space. A senior executive from a foreign financial institution that had recently leased office space told me they hope to expand their Hong Kong operations further, riding on the city’s current positive momentum. Market data also shows that vacancy levels of retail shop space in some core districts have shown improvement compared to the beginning of the year.
With many sectors of the economy performing well, and with visitor arrivals reaching 41 million in the first 10 months — a 12% increase year-on-year — we have also seen gradual improvement in the catering and retail sectors. Private consumption expenditure picked up slightly in the third quarter, with year-on-year growth rising to 2.1% in real terms, reflecting a gradual recovery in the local consumption market. Given the overall economic improvement and positive market expectations, we anticipate that labour market data to be released this Tuesday will show signs of stabilisation.
With this year included, Hong Kong’s economy will have achieved positive growth for three consecutive years. Looking ahead to next year, the Hong Kong economy is expected to continue expanding. International institutions generally forecast moderate global economic growth in 2026, with the Chinese Mainland and Asia as a whole being the key growth drivers. This, together with recent easing of trade tensions, will further support our export performance. Locally, consumption and business sentiment are improving, and both consumption and investment activities are expected to keep expanding. Although external uncertainties remain — such as the pace of US interest rate cuts and possible shifts in global trade policy — we will remain vigilant of risks while also seizing emerging strategic opportunities.
Last month, the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China (CPC Central Committee) adopted the Recommendations of the CPC Central Committee for Formulating the 15th Five-Year Plan for Economic and Social Development (15th Five-Year Plan), which outlines our country’s social and economic development over the next five years. To seize the vast opportunities brought by the country’s development and align with the key strategies of the 15th Five-Year Plan, we will proactively strengthen and enhance Hong Kong’s status as international financial, shipping and trading centres. We will also accelerate the development of an international innovation and technology hub, and actively build Hong Kong into a global hub for high-calibre talent. Hong Kong will better serve as a bridge connecting the Mainland with the world by continuing to serve as a gateway for attracting external resources and a strategic platform for Mainland enterprises to “go global”. All these efforts will help Hong Kong better integrate into and serve the overall national development, while driving significant economic and social growth for the city.
Hong Kong’s economy is gaining momentum, with new competitive advantages emerging amid changing circumstances. One of the preconditions for these hard-earned achievements is the constructive interaction between the executive and legislative branches in recent years, which has allowed us to focus on development and keep our economy on the right track. To further sustain this momentum, it is crucial that we all support the Legislative Council Election by casting our votes on December 7. Please encourage your family members, friends and colleagues to join you and vote for a better future together!
November 16, 2025
