Hong Kong Financial Chief Forecasts Stable or Lower Unemployment

2 hours ago7 min read

Hong Kong’s financial landscape is showing promising signs of resilience as Financial Secretary Paul Chan Mo-po projects a stabilisation or even a decline in the city's recent three-year high unemployment rate of 3. 9 per cent, a forecast underpinned by a notable upward revision in the GDP growth forecast for 2025 from a range of 2 to 3 per cent to a more robust 3.2 per cent. This recalibration, announced by Chan on Sunday, is not merely an abstract government projection but a data-driven response to the tangible economic momentum witnessed in the first quarter, which saw an actual growth of 3.3 per cent, outperforming many analyst expectations and signalling a potential turning point for the Asian financial hub. For market watchers and investors who, like myself, scrutinise every swing in the Hang Seng Index and parse the nuances of monetary policy, this revision is a critical indicator.It suggests that the post-pandemic recovery, coupled with a resurgence in tourism and a stabilising property market, is finally translating into broader economic gains that could filter down to the labour market. The relationship between GDP expansion and unemployment is a classic macroeconomic dynamic, often following the tenets of Okun's Law, and Hong Kong's current trajectory appears to be aligning with this principle.However, the path forward is not without its headwinds. The city's economy remains intricately linked to global financial currents and the often-volatile geopolitical climate between its major trading partners.A slowdown in the United States or a renewed trade tension could swiftly dampen this optimistic outlook, reminding us that in the world of macro-economics, as Warren Buffett might caution, one must be fearful when others are greedy. Furthermore, the structural composition of Hong Kong's job market is evolving; the traditional dominance of finance and trade is being challenged by a push towards innovation and technology sectors.The success of this transition will be paramount in determining whether the declining unemployment rate is sustainable or merely a cyclical uptick. Analysts will be closely monitoring the next set of labour force survey data, looking for confirmation that job creation is occurring across a diverse range of industries and wage levels, providing a solid foundation for household consumption and long-term economic health. In essence, while Paul Chan’s forecast provides a welcome dose of optimism, the true test will be whether this positive momentum can be insulated from external shocks and harnessed to build a more diversified and resilient economic engine for Hong Kong's future.

#featured

#Hong Kong

#unemployment rate

#economic growth

#GDP forecast

#Paul Chan

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