Panorama econòmic

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 third largest financial centre in the world in 2023, 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 + 6.3% (IMF, October 2022). According to the latest IMF forecasts growth is expected to decline at -0.8% in 2022 and come back in positive territory at 3.9% 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 -5.2% budget deficit from -3.3% in 2019. It recorded a Budget deficit equal to 3.60% of the country's Gross Domestic Product in 2021 (Hong-Kong Government, 2023). 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 and 3.3% in 2022. According to the IMF, the inflation rate was 1.6% in 2021 and 1.9% in 2022. Inflation rate should increase to 2.4% in 2023 and 2.5% in 2024 according to the latest World Economic Outlook of the IMF (October 2022). 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.

The unemployment rate increased from 2.9% in 2019 to 5.8% in 2020 and 5.6% in 2021 but started to decline at 4.5% in 2022. The IMF expects a reduction in the unemployment rate to 4% in 2023 and 3.7% in 2024. Risks and opportunities coexist for Hong Kong. There are dawning signs of an end to the pandemic, and Hong Kong is resuming customs clearance with the outside gradually. In 2023, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic.

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