Propelled by a resilient export performance and strengthening domestic demand, Hong Kong’s economy continued to expand steadily in the second quarter of 2025, with real GDP growing 3.1 percent year-on-year, up slightly from the 3.0 percent growth in the preceding quarter.

The latest figures came from the “Half-yearly Economic Report 2025”, released by the Hong Kong Special Administrative Region government on Friday.

Considering the actual figures for the first half of 2025, the forecast for real GDP growth in 2025 remains unchanged at 2 to 3 percent, the HKSAR government said.

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Despite ongoing global trade uncertainties stemming from US trade policies, Hong Kong’s total goods exports posted 11.5 percent year-on-year real growth in the second quarter, driven by resilient external demand and accelerated shipments ahead of potential US tariff measures, according to the report.

Meanwhile, service exports continued to expand significantly by 7.5 percent year-on-year in real terms, supported by robust growth in visitor arrivals, sustained expansion of cross-boundary transportation, and active financial and related business services amid buoyant local stock market conditions.

The labor market showed slight softening in the second quarter, based on the report. The seasonally adjusted unemployment rate rose from 3.2 percent in the previous quarter to 3.5 percent, with the underemployment rate also increasing. Nevertheless, employment income continued to register steady year-on-year growth.

With improved market sentiment following some easing of trade tensions, the local stock market maintained its upward trend in the second quarter, based on the report. The residential property market showed signs of stabilization during the quarter, with prices for flats largely holding steady and rentals remaining resilient.

Additionally, uncertainties surrounding the pace of US interest rate cuts could affect local investment sentiment. The future growth momentum of Hong Kong’s economy will depend to some extent on how these factors evolve, the report added.

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Cecilia Lam Kwok-ying, acting government economist from Hong Kong’s Office of the Government Economist, said that Hong Kong’s economy is expected to sustain growth through the remainder of the year.

Lam said that the full-year forecast for real GDP growth in 2025 remains unchanged at 2 to 3 percent, while the projections for underlying and headline consumer price inflation are maintained at 1.5 percent and 1.8 percent respectively. Both sets of figures are consistent with the May review results, she added.

Continued steady economic growth in Asia, particularly in the mainland, along with sustained increases in employment income, buoyant stock market performance, and stabilized residential property market, will benefit various sectors of Hong Kong’s economy, the report said.

Contact the writer at mikegu@chinadailyhk.com