Hong Kong: recorded a balance of payments surplus of HK $105.5 billion in the second quarter.

The Census and Statistics Department of the Hong Kong SAR Government released preliminary statistics for the second quarter of 2025 on Hong Kong's international balance of payments and international investment position, as well as preliminary statistics on Hong Kong's external debt. In the second quarter of 2025, Hong Kong recorded an international balance of payments surplus of HK$105.5 billion (equivalent to 13.4% of GDP), with reserves assets increasing accordingly. In contrast, the first quarter of 2025 recorded a deficit of HK$85.4 billion (equivalent to 10.7% of GDP). Current Account The current account surplus in the second quarter of 2025 amounted to HK$92.6 billion (equivalent to 11.8% of GDP), reflecting Hong Kong's savings exceeding investment, leading to an accumulation of external financial assets (such as equity securities or debt securities) to provide a buffer during global financial fluctuations. Compared to the current account surplus of HK$98.5 billion (equivalent to 13.0% of GDP) in the second quarter of 2024, the decrease in surplus is mainly due to an increase in trade deficits, offset by an increase in net primary income inflows. The trade deficit increased from HK$14.1 billion in the second quarter of 2024 to HK$38.0 billion in the same quarter of 2025. In the same period, the surplus in services trade slightly increased from HK$27.5 billion to HK$30.0 billion. Net primary income inflows and outflows in the second quarter of 2025 amounted to HK$624.6 billion and HK$517.6 billion respectively, resulting in a net inflow of HK$107.0 billion, compared to a net inflow of HK$90.2 billion in the same quarter of 2024. Financial Account Non-reserve financial assets in the second quarter of 2025 recorded an overall increase of HK$21.1 billion (equivalent to 2.7% of GDP), while in the first quarter of 2025, an overall increase of HK$245.8 billion (equivalent to 30.7% of GDP) was recorded. The overall increase in the second quarter of 2025 was due to a net increase in securities investments, while net decreases in other investments, direct investments, and financial derivatives offset most of the overall increase. Reserve assets increased by HK$105.5 billion in the second quarter of 2025, while in the first quarter of 2025, they decreased by HK$85.4 billion. International Investment Position At the end of the second quarter of 2025, Hong Kong's total external financial assets and liabilities were at high levels, amounting to HK$5,724.43 billion (equivalent to 177% of GDP) and HK$3,887.97 billion (equivalent to 120% of GDP) respectively, a common feature of a major international financial center. At the end of the second quarter of 2025, Hong Kong's net external financial assets (i.e. assets minus liabilities) reached HK$1,836.47 billion (equivalent to 57% of GDP), compared to HK$1,692.29 billion (equivalent to 53% of GDP) at the end of the first quarter of 2025. The ratio of Hong Kong's net external financial assets to GDP is one of the largest in the world, providing a strong buffer for the Hong Kong economy against unforeseen external shocks. External Debt At the end of the second quarter of 2025, Hong Kong's total external debt amounted to HK$1,546.36 billion (equivalent to 48% of GDP). Compared to HK$1,494.88 billion (equivalent to 47% of GDP) at the end of the first quarter of 2025, the total external debt increased by HK$51.48 billion, mainly due to increases in external debt across all sectors, especially in the banking sector, inter-company lending in direct investment, and other sectors. As a major financial center in the world, Hong Kong has a significant amount of external debt originating from the local banking sector through day-to-day banking operations. At the end of the second quarter of 2025, external debt from the banking sector accounted for 53.1% of the total. Other external debts mainly include external debts from other sectors (29.1%) and direct investment debts (inter-company lending) (16.6%).