Hong Kong recorded a balance of payments deficit of HK$136.5 billion in Q3.

The Census and Statistics Department of the Hong Kong government today released the preliminary statistics for the third quarter of 2025 on Hong Kong's international balance of payments and international investment position, and also released the preliminary statistics for Hong Kong's external debt for the same period. In the third quarter of 2025, Hong Kong recorded a deficit of 136.5 billion Hong Kong dollars in its international balance of payments (equivalent to 16.0% of GDP), with a corresponding decrease in reserve assets. I. International Balance of Payments In the third quarter of 2025, Hong Kong recorded a deficit of 136.5 billion Hong Kong dollars in its international balance of payments (equivalent to 16.0% of GDP), with a corresponding decrease in reserve assets. In the second quarter of 2025, a surplus of 105.5 billion Hong Kong dollars was recorded (equivalent to 13.4% of GDP). Current Account In the third quarter of 2025, the current account recorded a surplus of 98.2 billion Hong Kong dollars (equivalent to 11.5% of GDP), reflecting that Hong Kong's savings exceed investments, leading to the accumulation of external financial assets (such as equity securities or debt securities) that provide a buffer during global financial fluctuations. Compared to the surplus of 113.2 billion Hong Kong dollars in the third quarter of 2024 (equivalent to 13.9% of GDP), the decrease in surplus is mainly due to a decrease in net income inflows, while an increase in service trade surplus offset some of the decline in the current account surplus. In the third quarter of 2025, the trade in goods recorded a surplus of 1.5 billion Hong Kong dollars, while a deficit of 0.6 billion Hong Kong dollars was recorded in the same quarter of 2024. During the same period, the service trade surplus increased from 38.8 billion Hong Kong dollars to 48.1 billion Hong Kong dollars. The net inflow of primary income and secondary income in the third quarter of 2025 was 576.1 billion Hong Kong dollars and 521.5 billion Hong Kong dollars respectively, resulting in a net inflow of 45.5 billion Hong Kong dollars, while the same quarter of 2024 recorded a net inflow of 80.3 billion Hong Kong dollars. Financial Account Non-reserve financial assets in the third quarter of 2025 recorded an overall increase of 271 billion Hong Kong dollars (equivalent to 31.7% of GDP), while they recorded an increase of 21.1 billion Hong Kong dollars (equivalent to 2.7% of GDP) in the second quarter of 2025. The overall increase in the third quarter of 2025 was due to net increases in other investments, securities investments, and financial derivatives, while a net decrease in direct investment offset some of the overall increase. Reserve assets decreased by 136.5 billion Hong Kong dollars in the third quarter of 2025, while they increased by 105.5 billion Hong Kong dollars in the second quarter of 2025. II. International Investment Position At the end of the third quarter of 2025, both the total value of Hong Kong's external financial assets and liabilities were at a high level, amounting to 59.5868 trillion Hong Kong dollars (equivalent to 18.2 times GDP) and 39.369 trillion Hong Kong dollars (equivalent to 12.2 times GDP) respectively, a common feature of a major international financial center. At the end of the third quarter of 2025, the net value of Hong Kong's external financial assets (assets minus liabilities) reached 19.6499 trillion Hong Kong dollars (equivalent to 6.0 times GDP), while it was 18.3647 trillion Hong Kong dollars (equivalent to 5.7 times GDP) at the end of the second 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 to face sudden external shocks. III. External Debt At the end of the third quarter of 2025, Hong Kong's total external debt amounted to 15.7461 trillion Hong Kong dollars (equivalent to 4.8 times GDP). Compared to 15.4636 trillion Hong Kong dollars at the end of the second quarter of 2025 (also equivalent to 4.8 times GDP), the total external debt increased by 282.5 billion Hong Kong dollars, mainly due to an increase in external debt in other sectors, while an increase in external debt in the banking sector, direct investment debt liabilities (inter-company borrowing), and external debt of the Hong Kong Monetary Authority also played a role in the increase. As one of the major financial centers in the world, Hong Kong has a large amount of external debt originating from the local banking sector and generated through daily banking operations. At the end of the third quarter of 2025, external debt in the banking sector accounted for 52.3% of the total. Other external debts mainly include external debts in other sectors (29.9%) and direct investment debt liabilities (inter-company borrowing) (16.5%).