Core Insights - Hong Kong recorded an international balance of payments deficit of HKD 85.4 billion in Q1 2025, equivalent to 10.7% of its GDP, contrasting with a surplus of HKD 31.4 billion in Q4 2024 [1] Current Account - The current account surplus for Q1 2025 was HKD 125.2 billion, representing 15.7% of GDP, an increase from HKD 95.3 billion (12.4% of GDP) in Q1 2024, driven by higher primary income net inflows and service trade surpluses [2] - The goods trade deficit decreased from HKD 6.2 billion in Q1 2024 to HKD 3.0 billion in Q1 2025, while the service trade surplus increased from HKD 44.7 billion to HKD 54.9 billion during the same period [2] - Primary income inflows and outflows in Q1 2025 were HKD 521.3 billion and HKD 441.6 billion, respectively, resulting in a net inflow of HKD 79.7 billion, up from HKD 61.3 billion in Q1 2024 [2] Financial Account - Non-reserve financial assets recorded an overall increase of HKD 245.8 billion in Q1 2025, equivalent to 30.7% of GDP, compared to HKD 102.5 billion (12.3% of GDP) in Q4 2024, driven by increases in other investments, securities investments, and direct investments [3] Reserve Assets - Reserve assets decreased by HKD 85.4 billion in Q1 2025, following an increase of HKD 31.4 billion in Q4 2024 [4] International Investment Position - As of the end of Q1 2025, Hong Kong's total external financial assets and liabilities were HKD 54,485.1 billion and HKD 37,562.2 billion, respectively, indicating a high level typical of major international financial centers [5] - The net value of Hong Kong's external financial assets reached HKD 16,922.9 billion (5.3 times GDP) in Q1 2025, up from HKD 15,872.9 billion (5.0 times GDP) in Q4 2024, providing a strong buffer against external shocks [5] External Debt - Hong Kong's total external debt was HKD 14,948.8 billion (4.7 times GDP) at the end of Q1 2025, an increase of HKD 11.88 billion from HKD 14,830.0 billion (4.7 times GDP) in Q4 2024, primarily due to increases in external debt from other sectors and the banking sector [6] - The banking sector accounted for 53.3% of total external debt, with other external debts comprising 29.3% and direct investment debt liabilities at 16.2% [6]