Hong Kong’s 2024 GDP growth expected at 2.4%, business confidence feeble amid trade war fears, survey finds
Hong Kong Free Press
Hong Kong’s economic growth this year is forecast to be 2.4 per cent, lower than the 3.2 per cent in 2023, as businesses remained pessimistic about 2025 amid fears of a trade war between Beijing and Washington, according to a survey by the Hong Kong General Chamber of Commerce.
The chamber, releasing the results of its annual business prospects survey on Thursday, said businesses in the city had named the global economic slowdown, high operating costs and geopolitical tensions as key challenges this year.
The survey was conducted last month and collected 219 responses from firms including professional and business services providers, trading companies, and financial services operators.
Gross domestic product (GDP) growth for 2025 is predicted at 2.3 per cent, according to the chamber, with inflation at two per cent.
In the first 10 months of 2024, 29.2 per cent of firms surveyed said their turnover had increased from last year. Some 31 per cent said it remained the same while 39.8 per cent said their turnover had decreased.
Business confidence had not rebounded, according to the chamber, with only 31.1 per cent expecting increased revenue next year. Some 45.2 per cent said it would remain the same while 23.7 per cent expected a drop.
More businesses – 44.3 per cent – had a negative economic outlook compared to the 18.3 per cent which were optimistic.
Speaking at a press conference on Thursday, chamber economist Doris Fung said the possibility of a looming trade war during Donald Trump’s second term in the White House had dampened firms’ confidence.
“But we are also confident in the Hong Kong business community, they are more prepared this time with the new US government,” she said.
Fung also said a weak European market, especially in Germany and in France, had added to local firms’ negative outlook.
‘Far more positive’ in GBA
The chamber said investment sentiment remained soft locally, with almost two-thirds of respondents expecting to maintain their capital investment levels in 2025 rather than increase them.
But it said members had been positive about markets in mainland China, Southeast Asia, and the Middle East.
“For investments in the Greater Bay Area (excluding Hong Kong), sentiment was far more positive,” the chamber said in a press release, adding that 34 per cent of those who were already operating in GBA indicated they would increase investment next year.
More than a third of the respondents planned to invest more in Southeast Asian markets and 25.9 per cent of them in the Middle East.
The GBA consists of Hong Kong, Macau and nine major cities in China’s Guangdong province, and has been designated by Beijing as an innovation hub.
“Due to the general economic malaise around the world, strong growth in these regions can also help Hong Kong companies offset economic and geopolitical headwinds,” chairperson Agnes Chan said in the press release.
The survey also found that almost half of the respondents would maintain their current headcount next year, while about 40 per cent said they would increase pay for employees.
While the economy continued to face headwinds from internal and external challenges, the chamber said the launch of new mega infrastructure projects, including the third runway and the Kai Tak Sports Park, would benefit long-term growth.
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