Hong Kong's economy grew 3.1 percent year on year in the second quarter of 2025, beating analysts' expectations and growing faster than the first three months of the year.

It also marked the 10th consecutive quarter of growth.

Private consumption showed signs of improvement, rising by 1.9 percent in real terms in the second quarter over a year earlier, compared with a decrease of 1.2 percent in the first quarter.

A government spokesperson said Hong Kong's economy continued to expand solidly in the second quarter, supported by strong exports and improved domestic demand.

Exports of services also grew notably thanks to strong inbound tourism growth as well as vibrant financial and business activities amid the buoyant stock market, along with the improved investment and consumption situation.

"The Hong Kong economy exhibited remarkable resilience in the first half of 2025," the spokesperson said, adding that steady economic growth in Asia and the mainland, along with government's supportive measures, including investment drives, would continue to boost the city.

"Nevertheless, uncertainties in the external environment remain elevated. The [United States'] renewed tariff hikes of late will exert pressure on global trade flows as well as its domestic economic activity and inflation."

The spokesperson added "the uncertain pace of US interest rate cuts will also affect investment sentiment", while the economic bump from "rush shipments" to the United States, to get ahead of tariffs, was expected to fade later this year.

Meanwhile, Hong Kong's retail sales also rose for the second month in a row this year, after a 14-month decline.

Official figures showed that the value of total retail sales increased by 0.7 percent year on year in June, to stand at a little over 30 billion Hong Kong dollars. That follows a 2.4 percent annual increase in May.

Commenting on the latest figures, Raymond Yeung, Australia and New Zealand Banking Group chief economist for Greater China, said that the retail figures were not ideal.

"The latest retail sales numbers remained quite weak, only rising by 0.7 percent year on year in June, and there's the financial stresses from the property developers here in Hong Kong," he said.

"So there are still many risk aspects of the economy that remain as major concerns to me, the gross domestic product data is only one story of the economy, and we need to pay attention to some of such factors still affecting the structural outlook," he said.

Yeung also noted that the latest trade talks between China and the US offers some relief.

"Based on the previous rounds of talks from Geneva, London, to Stockholm, it seems that the talks went well with progress made in terms of reaching a deal," he added.
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Last updated: 2025-07-31 HKT 21:34