In the first quarter of 2025, Hong Kong's economy saw a year-on-year growth rate of 3.1%, marking an increase from the previous quarter's 2.5% expansion, as reported by Acting Government Economist Cecilia Lam. This economic progress was largely propelled by robust exports and a revival in investment activities. Despite some setbacks in private consumption, the government has maintained its full-year GDP growth forecast within the range of 2-3%. However, uncertainties persist due to global trade dynamics and potential impacts from U.S. policies.

Acting Government Economist Cecilia Lam highlighted that Hong Kong's economy performed better than anticipated during the opening quarter of 2025. The primary driver behind this growth was the significant rise in goods exports, which surged by 8.4% compared to the same period last year. Services exports also experienced a healthy increase of 6.6%, buoyed by increased tourist arrivals and heightened cross-border financial transactions. Investment expenditure further contributed positively, growing at a rate of 2.8% primarily due to machinery acquisitions and elevated property transaction costs.

Nonetheless, not all sectors exhibited such positive trends. Private consumption witnessed a decline of 1.1%, indicating evolving consumer spending patterns. Although this decline may raise concerns, Lam expressed optimism regarding future export performance, attributing it to easing global trade tensions and consistent growth in Mainland China. Yet, she cautioned about the potential adverse effects of uncertainties surrounding U.S. trade and monetary policies on global sentiment.

By the end of March, market prudence became apparent, with residential property transactions experiencing a notable drop of 19% from the preceding quarter. Despite these challenges, Lam anticipates moderate price pressures in the near term. For 2025, the government projects underlying inflation at 1.5% and headline consumer price inflation at 1.8%, reflecting a stable economic outlook amidst various external factors.

While certain segments of the economy faced challenges, others demonstrated resilience and potential for further growth. The interplay between export strength, investment recovery, and cautious consumer behavior paints a complex yet hopeful picture for Hong Kong's economic trajectory in the coming months. Continued vigilance towards international developments will be crucial in sustaining this momentum while navigating potential obstacles ahead.