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<Research>HSBC Global Research Trims HK GDP Forecast, Projects 2025 Growth to Ease to 2%
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HSBC Global Research said in its report that Hong Kong's economic momentum tapered off in the third quarter, and the broker became increasingly cautious on the external demand front due to uncertainty over US-China relations. At the same time, domestic demand is facing structural changes and monetary easing may be slower than originally expected. The broker foresaw the larger fiscal deficit to provide a cushion, but overall growth in Hong Kong may remain subdued. As a result, the broker lowered its forecast for Hong Kong's GDP growth from 3% to 2.5% in 2024, from 2.7% to 2% in 2025, and from 2.5% to 1.8% in 2026. The Hong Kong property market has demonstrated positive signs of recovery since the rate cuts were initiated in the U.S., leading to a decline in real mortgage rates, HSBC Global Research mentioned. Sales rebounded in October and November. However, as the broker projected more gradual easing in 2025 and fewer Fed rate cuts in the future, this may mean a more muted boost to investment and asset markets. The broker estimated the Fed to cut rates by 75 bps in 2025 and not cut rates in 2026. The broker expected Hong Kong's policy rate to sink to 4% by the end of 2025 and stay put until the end of 2026, which is expected to bring some benefits to real estate and investment. AAStocks Financial News |
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