Hong Kong Economic Growth Could Exceed 3% Under Five-Year Plan, Says Citi

Hong Kong economic growth could exceed 3% annually over the medium term if the city successfully strengthens its “super-connector” role under China’s 15th Five-Year Plan, according to Citi Research.

Citi said the framework could reduce policy uncertainty and channel capital towards finance, trade, innovation and technology, with the Northern Metropolis providing an important platform for advanced industries.

Rapid expansion of Hong Kong’s offshore yuan business was identified as a potential near-term earnings driver, supported by increasing yuan settlement, lending and bond issuance.

Citi described the Northern Metropolis as the city’s largest medium-term asset-allocation theme.

However, the bank identified implementation delays, yuan weakness, slower mainland Chinese economic growth and geopolitical tensions as potential risks.

Citi expects Hong Kong’s fiscal balance to equal 0.6% of GDP in 2026 and 0.2% in 2027, before reaching around 0.3%-0.4% during 2028-30.