Hong Kong SAR, China flag Hong Kong SAR, China: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

As the tenth largest trading power and the fifth largest financial centre in the world, Hong Kong is often cited as a model of liberal economics. However, the economy has been experiencing a slowdown in recent years, with a GDP growth of -6.1% in 2020, against -1.2% in 2019. This slowdown results largely from the impact of the COVID-19 pandemic, but also from the cooling Chinese economy, trade tensions with the United States, decreased FDI, and tighter credit conditions forcing the Hong Kong Monetary Authority (HKMA) to imitate rate increases. According to Financial Times, Hong Kong’s economy has also suffered from the many protests in 2019 and 2020. Positive GDP growth came back in 2021 with + 6.4% (IMF, October 2021). According to the latest IMF forecasts growth is expected to reach +3.5% in 2022 and remain at 3.1% in 2023, subject to the post-pandemic global economic recovery.

Due to the impact of the global economic context of 2020, the Hong Kong Government closed the year 2020 with a -10.6% budget deficit from -3.3% in 2019. It was back to -3.9% in 2021 (Hong-Komg Government, 2022). The protests and the export pressure from the US-China trade war also affect the government balance. Hong Kong continues to have solid public finances despite a public debt increasing from 1% of GDP in 2020 to 2.1% in 2021. According to the IMF, the inflation rate dropped from 2.9% in 2019 to 0.3% in 2020 before reaching 1.9% in 2021. Inflation rate should increase to 2.1% in 2022 and 2.3% in 2023 according to the latest World Economic Outlook of the IMF (October 2021). Credit expansion and a tight housing supply have caused Hong Kong property prices to rise rapidly in recent years. Lower and middle-income segments of the population are increasingly unable to afford adequate housing. Tourism is largely affected by the ongoing protests and pandemic and tourism from China (75% of total visitors) is also expected to remain weak because of slower economic growth in mainland China and the depreciation of the RMB in relation to the HKD.

In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic.The unemployment rate increased from 2.9% in 2019 to 5.8% in 2020 and 5.6% in 2021. The IMF expects a reduction in the unemployment rate, with 4.6% in 2022 and 4.2% in 2023. Challenges also include pro-China vs anti-China sentiment, rising income inequality, and lack of economic innovation (Coface, 2022).

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 344.92369.16368.37387.46406.74
GDP (Constant Prices, Annual % Change) -6.56.3-0.93.93.0
GDP per Capita (USD) 4649495254
General Government Balance (in % of GDP) -5.20.8-1.6-0.3-0.1
General Government Gross Debt (in % of GDP) 1.02.13.34.34.7
Inflation Rate (%) 0.31.61.92.42.5
Unemployment Rate (% of the Labour Force) 5.85.24.54.03.7
Current Account (billions USD) 24.0941.5931.7723.0317.49
Current Account (in % of GDP) 7.011.38.65.94.3

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20152016201820192020
Hong Kong Dollar (HKD) - Average Annual Exchange Rate For 1 GHS 2.091.951.711.501.39

Source: World Bank, 2015

 

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Latest Update: November 2022