The International Monetary Fund (IMF) has concluded its 2024 Article IV mission to Hong Kong Special Administrative Region (SAR), releasing a statement on January 10, 2025. The document outlines the preliminary findings of the IMF staff following their official visit to Hong Kong. These missions are part of regular consultations under Article IV of the IMF's Articles of Agreement.
The report highlights that Hong Kong SAR's economy is recovering gradually but unevenly after enduring a prolonged period of shocks. "With continued economic slack and external and domestic headwinds, policies should be geared toward supporting domestic demand and mitigating risks," states the IMF staff.
The authorities have agreed to publish this statement, though it reflects the views of the IMF staff and not necessarily those of the IMF’s Executive Board. A detailed report will be prepared based on these preliminary findings for further discussion by the board.
A key observation from the mission is that Hong Kong's plan for gradual fiscal consolidation is suitable as it aids in sustaining recovery efforts. However, additional actions are recommended to increase government revenues in order to manage aging-related expenses and fund growth-enhancing investments in the medium term.
Despite manageable financial sector risks due to existing buffers and a robust regulatory framework, some areas require enhanced monitoring and oversight. Rapid population aging coupled with increased regional competition necessitates boosting labor supply and productivity while identifying new growth drivers for sustainable growth. Addressing climate change-related risks and advancing green transition are also deemed critical by the IMF team.
In concluding their visit, the mission expressed gratitude towards authorities in both Hong Kong SAR and Shenzhen for their cooperation: "The mission would like to thank the authorities in Hong Kong SAR and Shenzhen for excellent discussions, meticulous organization, and the warm hospitality extended to us throughout our visit."