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IMF recognises Hong Kong’s position as international financial centre and fiscal consolidation path
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Jan
Jan
Following the completion of the 2024 Article IV Consultation with the Hong Kong Special Administrative Region (HKSAR), the International Monetary Fund (IMF) Staff Mission released its Concluding Statement on January 10, 2025. The Mission acknowledged Hong Kong’s gradual economic recovery despite ongoing challenges and reaffirmed its status as an international financial centre with a resilient financial system supported by robust frameworks, ample policy buffers, and the effective Linked Exchange Rate System (LERS). It deemed the government’s gradual fiscal consolidation appropriate, projecting narrowing fiscal deficits driven by new revenue measures, expenditure control, and reduced pandemic-related spending. Financial Secretary Paul Chan welcomed the assessment, emphasizing efforts to strengthen Hong Kong’s international financial position, manage expenditure growth, and identify new revenue sources while maintaining a low-tax system. Chief Executive of the Hong Kong Monetary Authority (HKMA), Eddie Yue, highlighted the Mission’s recognition of Hong Kong’s robust regulatory framework and the suitability of the LERS. The Mission projected 2.7% GDP growth in 2024 and 2025, praised efforts to develop new growth drivers, and supported the cancellation of demand-side property measures. It also noted the strong capitalization and liquidity of local banks, low mortgage delinquencies, and advancements in green and sustainable finance. The Mission’s full report will be reviewed by the IMF Executive Board later this month.
Resources: https://www.info.gov.hk/gia/general/202501/10/P2025011000299.html