Hong Kong’s economy grew faster than expected in the second quarter, pointing to some stability in key sectors despite challenges in real estate and retail.
GDP expanded 3.3 percent in the three months ended June from the prior year, according to advance estimates from the Census and Statistics Department yesterday. That’s higher than a median estimate of 2.7 percent and exceeded even the most bullish forecast among economists surveyed by Bloomberg News.
The data signals resilience in the region’s financial hub after several years of pressure from the COVID-19 pandemic and high borrowing costs. Increasing trade and capital flows from mainland China into the city have helped buoy growth so far this year.
Photo: Isaac Lawrence, AFP
The better-than-expected uptick may help the government achieve its full-year growth target of 2.5 percent to 3.5 percent. It followed strong first-quarter expansion that was revised up to 2.8 percent from 2.7 percent.
Exports grew at a double-digit pace for the last three straight months, driven by strong global demand. But the outlook remains challenged by the real estate sector downturn and a slowing economy in China, the city’s largest trading partner.
“The economy should continue to grow in the remainder of the year, but performance of the different economic segments may vary amid uncertainties on various fronts,” a government spokesperson said in a statement. The person cited geopolitical tensions, trade conflicts and US interest rate trajectory as potential headwinds.
Hong Kong’s economy is one of the slowest growing in the region. Analysts surveyed by Bloomberg expect growth will dip to a 2.7 percent pace this year from 3.3 percent last year, the only developed economy in Asia forecast to slow except Japan.
On a quarterly basis, GDP expanded 0.4 percent from the first quarter, according to the statement.
Goods exports and imports of services rose the most among GDP components from the prior year. Fixed capital formation, a category that includes the total value of investment spending, also increased at a faster pace.
Private consumption fell in the quarter for the first time since the third quarter of 2022. Spending has been restrained by a strong currency, pegged to the US dollar, and weaker sentiment. The government said the changes in spending habits of locals and tourists and the strong Hong Kong dollar “may continue to pose challenges.”
Real estate has been a particular sore spot, as demand remains weak with higher mortgage rates. Residential property prices have fallen to their lowest since 2016, increasing the risk of homebuyers finding themselves under water on loans. Office buildings are finding it difficult to attract tenants.
The dour mood and more frugal tourists have also kept a lid on retail spending, with sales falling for a third straight month in May, the longest streak since 2021. Many locals also spend across the border in Shenzhen and other mainland cities where goods and services tend to be cheaper.
BIG BUCKS: Chairman Wei is expected to receive NT$34.12 million on a proposed NT$5 cash dividend plan, while the National Development Fund would get NT$8.27 billion Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday announced that its board of directors approved US$15.25 billion in capital appropriations for long-term expansion to meet growing demand. The funds are to be used for installing advanced technology and packaging capacity, expanding mature and specialty technology, and constructing fabs with facility systems, TSMC said in a statement. The board also approved a proposal to distribute a NT$5 cash dividend per share, based on first-quarter earnings per share of NT$13.94, it said. That surpasses the NT$4.50 dividend for the fourth quarter of last year. TSMC has said that while it is eager
‘IMMENSE SWAY’: The top 50 companies, based on market cap, shape everything from technology to consumer trends, advisory firm Visual Capitalist said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was ranked the 10th-most valuable company globally this year, market information advisory firm Visual Capitalist said. TSMC sat on a market cap of about US$915 billion as of Monday last week, making it the 10th-most valuable company in the world and No. 1 in Asia, the publisher said in its “50 Most Valuable Companies in the World” list. Visual Capitalist described TSMC as the world’s largest dedicated semiconductor foundry operator that rolls out chips for major tech names such as US consumer electronics brand Apple Inc, and artificial intelligence (AI) chip designers Nvidia Corp and Advanced
Saudi Arabian Oil Co (Aramco), the Saudi state-owned oil giant, yesterday posted first-quarter profits of US$26 billion, down 4.6 percent from the prior year as falling global oil prices undermine the kingdom’s multitrillion-dollar development plans. Aramco had revenues of US$108.1 billion over the quarter, the company reported in a filing on Riyadh’s Tadawul stock exchange. The company saw US$107.2 billion in revenues and profits of US$27.2 billion for the same period last year. Saudi Arabia has promised to invest US$600 billion in the US over the course of US President Donald Trump’s second term. Trump, who is set to touch
SKEPTICAL: An economist said it is possible US and Chinese officials would walk away from the meeting saying talks were productive, without reducing tariffs at all US President Donald Trump hailed a “total reset” in US-China trade relations, ahead of a second day of talks yesterday between top officials from Washington and Beijing aimed at de-escalating trade tensions sparked by his aggressive tariff rollout. In a Truth Social post early yesterday, Trump praised the “very good” discussions and deemed them “a total reset negotiated in a friendly, but constructive, manner.” The second day of closed-door meetings between US Secretary of the Treasury Scott Bessent, US Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng (何立峰) were due to restart yesterday morning, said a person familiar
RSS