Fubotv earnings beat by $0.10, revenue topped estimates
Investing.com -- Bank of America (BofA) made today a downward revision of Hong Kong’s GDP growth forecast for the year 2025 to 1.3%, citing the escalation of global trade tensions. The BofA global economics team has also reduced its global growth forecasts for 2025/26 to 2.8%/3.0%.
The bank’s analysts believe that Hong Kong, as a regional entrepot and international financial center, could face significant challenges due to these trade tensions, prompting a revision of the city’s GDP growth forecasts to 1.3%/1.7% for 2025/26, down from earlier estimates of 2.0%/2.4%.
The report highlights concerns about the potential disruption to Hong Kong’s trading and logistics sector, which is one of the city’s four key industries. The analysts at BofA expect that the most considerable impact on GDP growth would come from a direct decrease in trade, particularly with the United States.
While trade bound for the US represents 6.5% of Hong Kong’s total trade and contributes to 9% of its GDP, the bank estimates that trade-related demand from the US alone accounts for approximately 1.5% of Hong Kong’s GDP.
BofA’s analysis suggests that while some may believe Hong Kong could benefit from additional trade diversion if the US were to lower tariffs on shipments from Hong Kong, this scenario is unlikely. The analysts note that US customs enforcement of "country of origin" rules, which levy tariffs based on where a product is manufactured, would prevent this benefit.
Furthermore, the possibility of increased informal trade, such as Chinese firms importing US goods via Hong Kong, is not expected to be significant enough to counterbalance the overall decline in trade volume. The bank acknowledges that these forecasts are subject to a wide range of uncertainty.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.