Hong Kong's Financial Services and the Treasury Bureau published the International Monetary Fund staff mission’s concluding statement from the 2024 Article IV Consultation, which characterises the economy as on a gradual recovery path amid headwinds, reaffirms Hong Kong’s status as an international financial centre, and views the Government’s medium-term fiscal consolidation direction as appropriate. The assessment also notes the smooth functioning of the Linked Exchange Rate System. The IMF projects real gross domestic product growth of 2.7% in both 2024 and 2025 and expects the fiscal deficit to narrow further, supported by new revenue measures, expenditure control and the winding down of pandemic-related spending. It finds locally incorporated banks well capitalised and liquid with strong profitability, with low domestic mortgage delinquencies, and welcomes the Hong Kong Monetary Authority’s decision to introduce a positive-neutral countercyclical capital buffer rate to increase banking sector capacity to support lending when system-wide risks materialise. The statement also recognises the appropriateness of cancelling all demand-side management measures for residential properties and notes progress in developing green and sustainable finance. The full Article IV report is scheduled for discussion by the IMF Executive Board in January 2025, and the Government indicated it will study the IMF’s recommendations.

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