Economic Overview - In Q1 2025, Hong Kong's GDP grew by 3.1% year-on-year and 1.9% quarter-on-quarter, indicating a faster economic recovery compared to Q4 2024 [2][5] - Domestic demand showed a decline in consumption but a positive turnaround in investment, with private consumption expenditure down by 1.1% year-on-year, while fixed capital formation increased by 2.8% [2][5][8] - External demand saw a rebound in goods exports, which grew by 8.4% year-on-year, and service exports increased by 6.6% [5][9][10] Employment and Inflation - The unemployment rate in Q1 2025 was 3.2%, a slight increase from Q4 2024, but still at a low level [13] - The overall consumer price index (CPI) rose by 1.6% year-on-year, reflecting moderate inflation [14][15] Currency and Interest Rates - The Hong Kong dollar strengthened in Q1 2025, with the exchange rate remaining within the strong-side convertibility zone [16][17] - The benchmark interest rate remained unchanged in Q1 2025, while HIBOR rates declined significantly, leading to expectations of lower deposit rates [20][54] Stock Market Activity - The Hong Kong stock market continued to recover in Q1 2025, with the Hang Seng Index rising above 24,000 points, supported by policy initiatives and increased trading activity [22][23] - Average daily trading volume increased to HKD 240.4 billion, up from HKD 186.1 billion in Q4 2024 [23] Real Estate Market - The real estate market in Hong Kong showed an upward trend in transaction volume, with new and second-hand home sales increasing by 36% and 19% year-on-year, respectively [3][28] - Residential rental yields rose to approximately 3.7%, driven by stable prices and increasing rents [3][28] Banking Sector - The banking sector experienced a 4.7% increase in customer deposits compared to the beginning of the year, with a decline in the loan-to-deposit ratio to 55.5% [41][42] - The net interest margin may face pressure due to declining HIBOR rates, but banks are adjusting deposit rates to mitigate this impact [54][57] Investment Opportunities - The rebound in external demand and the recovery in the financial services sector are expected to support continued economic growth [10][22] - The real estate market's stabilization and potential for inventory reduction present investment opportunities in the property sector [28][33]
中金 • 联合研究 | 外需增速反弹，金融继续回暖 ——香港经济金融季报