Strong Rebound in External Accounts
Hong Kong's external financial position demonstrated a robust performance in the second quarter of 2025, with the Census and Statistics Department (C&SD) reporting a preliminary Balance of Payments (BoP) surplus of $105.5 billion. This figure represents 13.4% of the Gross Domestic Product (GDP) for the quarter and marks a substantial turnaround from the $85.4 billion deficit recorded in the first quarter of 2025. The surplus led to a corresponding increase in the city's reserve assets.
The C&SD released these key macroeconomic statistics, which also included the International Investment Position (IIP) and External Debt (ED) figures, on September 19, 2025.
Current Account Performance
The current account, a major component of the BoP, registered a surplus of $92.6 billion, equivalent to 11.8% of GDP, in the second quarter of 2025. This indicates that Hong Kong's savings surpassed its investment during the period, enabling the accumulation of external financial assets.
A breakdown of the current account reveals several key movements:
- The goods deficit widened to $38.0 billion in Q2 2025, compared to $14.1 billion in the same quarter of 2024.
- The services surplus saw a slight increase, reaching $30.0 billion, up from $27.5 billion in Q2 2024.
- Primary income recorded a net inflow of $107.0 billion, an increase from $90.2 billion in Q2 2024.
- Secondary income showed a net outflow of $6.4 billion, compared to $5.1 billion in Q2 2024.
International Investment Position and External Debt
Hong Kong's status as a prominent international financial center was underscored by its International Investment Position (IIP) at the end of Q2 2025. External financial assets stood at a substantial $57,244.3 billion (17.7 times of GDP), while external financial liabilities amounted to $38,879.7 billion (12.0 times of GDP).
The net external financial assets, calculated as assets minus liabilities, reached $18,364.7 billion (5.7 times of GDP). This figure represents an increase from $16,922.9 billion (5.3 times of GDP) at the end of the first quarter of 2025, providing a strong buffer against potential external shocks.
Regarding External Debt (ED), Hong Kong's gross external debt totaled $15,463.6 billion (4.8 times of GDP) at the close of Q2 2025. This marked an increase of $514.8 billion from the previous quarter, with the banking sector accounting for 53.1% of the total debt.
Broader Economic Context
These positive external account figures align with Hong Kong's overall economic growth. The city's real GDP expanded by 3.1% year-on-year in the second quarter of 2025, slightly higher than the 3.0% growth recorded in the first quarter. This sustained growth, coupled with a strong BoP surplus, highlights the resilience and adaptability of Hong Kong's economy in the global landscape.
5 Comments
Africa
The robust GDP growth and BoP surplus are encouraging, painting a picture of economic strength. Yet, one must consider the broader geopolitical context and potential impacts of mainland policies on this apparent stability.
Habibi
These figures feel manipulated to project stability. Where's the transparency?
ZmeeLove
While the Q2 surplus is certainly a positive sign for Hong Kong's immediate financial health, the widening goods deficit suggests underlying structural imbalances that need addressing for long-term stability.
Muchacho
A surplus built on what exactly? Still too reliant on mainland policies.
Coccinella
Hong Kong's strong international investment position is undeniable, reinforcing its financial hub status. But, the question remains whether this prosperity is truly independent or increasingly tied to factors beyond local control.