Hong Kong Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
×

Sign up to download the Hong Kong Country Risk Report

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.

Hong Kong Country Risk Report
Product Price
$1,195.00

Hong Kong

Core Views

  • The Hong Kong economy's Q116 downturn is likely to be a harbinger of a further slowdown, and we have therefore downgraded our 2016 real GDP growth forecast for the territory to 1.2%, versus 1.7% previously. Our downward revision reflects weaknesses in both the domestic real estate market, as well as China-related external headwinds which will continue to undermine trade activity. We also note that the slowdown is likely to continue into 2017, for which we have downgraded our real GDP forecast to 1.7%, versus 2.2% previously.

  • The HKMA is unlikely to remove its macroprudential measures targeting the residential real estate market despite a significant decline in price levels over recent quarters. With affordability ratios still extremely stretched, both the monetary authority and the government will likely hold out for a deeper price correction before making significant adjustments. Meanwhile, we maintain our forecast for headline inflation to cool to 2.0% by the end of 2016, versus a 2.6% y-o-y print in May.

  • Hong Kong's quadrennial legislative elections in September are unlikely to produce a significantly different government than the one currently in power in the city-state, as the failure to achieve universal suffrage has left intact a hybrid-electoral system that favours the pro-Beijing camp. Meanwhile, Beijing's grip on the city-state will continue to strengthen over the coming years as the Xi administration maintains a politically conservative line. This will likely entail a further widening of the gulf between the electorate and the government, which could have implications on Hong Kong's long-term social stability outlook.

Key Risks

  • The potential for a financial or economic crisis in China continues to be by far the biggest risk factor for Hong Kong. Such a crisis would hit Hong Kong hard given its deep trade and financial linkages to the mainland, and the high proportion that financial and trade services comprise of Hong Kong's economy.

Macroeconomic Forecasts (Hong Kong 2014-2017)
Indicator 2014 2015e 2016f 2017f
BMI/Census and Statistics Department
Nominal GDP, USDbn 290.9 308.7 318.6 331.4
Real GDP growth, % y-o-y 2.5 2.4 1.2 1.7
Consumer price inflation, % y-o-y, eop 4.9 2.4 2.0 2.5
Exchange rate HKD/USD, eop 7.75 7.75 7.77 7.77
Budget balance, % of GDP 3.3 1.3 1.2 1.3
Current account balance, % of GDP 1.8 2.9 2.7 1.9
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Foreboding Outlook For 2016-17 As China Weighs
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
9
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
10
Restrained Budget Keeps Powder Dry
10
Structural Fiscal Position
12
External Trade And Investment Outlook
12
Current Account Steady Despite Trade Woes
12
Outlook On External Position
13
TABLE: TOP 5 GOOD EXPORTS 2015
13
TABLE: TOP 5 GOODS IMPORTS 2015
14
Monetary Policy
15
HKD Peg Sails Through Volatility, But Tail Risks Remain
15
Monetary Policy Framework
16
Chapter 2: 10-Year Forecast
19
The Hong Kong Economy To 2025
19
Mainland Exposure A Double-Edged Sword
19
TABLE: LONG-TERM MACROECONOMIC FORECASTS
19
Chapter 3: Political Outlook
21
SWOT Analysis
21
BMI Political Risk Index
21
Domestic Politics
22
Gulf Between Government, Electorate Will Widen Further
22
TABLE: POLITICAL OVERVIEW
22
Long-Term Political Outlook
23
Benign Outlook Despite Rising Social Difficulties
23
Chapter 4: Operational Risk
27
SWOT Analysis
27
Operational Risk Index
27
Operational Risk
28
TABLE: OPERATIONAL RISK
28
Economic Openness
29
TABLE: TOP 5 TRADE PARTNERS - PRODUCT IMPORTS (2010- 2014), USDMN
30
TABLE: FREE TRADE AGREEMENTS
32
Availability Of Labour
35
TABLE: ASIA - AVAILABILITY OF LABOUR RISK
36
TABLE: TOP 10 SOURCE COUNTRIES FOR MIGRANT WORKERS
38
TABLE: LABOUR FORCE EMPLOYMENT BY SECTOR ('000), 2009-2012
39
Chapter 5: BMI Global Macro Outlook
41
Global Macro Outlook
41
Emerging Markets Nearing Inflexion Point
41
TABLE: GLOBAL ASSUMPTIONS
41
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
42
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
42
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
43
TABLE: MACROECONOMIC DATA & FORECASTS
45

Assess your risk exposure in Hong Kong with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Hong Kong with confidence.

Your subscription service includes:

  • Delivery of the report in print and PDF
  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
  • The ability to export data and graphs from the online report directly into your workflow
  • The support of a dedicated Account Manager to answer any questions you might have about your subscription
  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report