Company: HBCYF
Filing Date: 2025-04-29
Form Type: 6-K
Source: 0001089113-25-000046
Chunk: 41

Company: HSBC HOLDINGS PLC
Filing Date: 2025-04-29
Form: 6-K
Chunk 41
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 reduce global trade activity and weigh on GDP growth as a consequence. Mainland China, Hong Kong and Mexico are expected to experience the greatest negative direct effects in terms of economic impact, given their deeper trade and financial interlinkages with the US economy. Indirect consequences from tariffs are forecast to reduce growth elsewhere through lower confidence and investment. Alongside the implementation of higher tariffs, economic growth in the US and UK continues to face headwinds from high interest rates and higher price levels. Hong Kong is also suffering from the effects of high interest rates and lower tourist spending, which has weakened domestic consumption. In mainland China, authorities are increasing fiscal support to boost economic activity and ensure that, despite trade headwinds, growth remains close to the official target. In Europe, where manufacturing has been suffering a long period of contraction, a trade war is expected to further weaken growth, and a rise in fiscal spending, which is still uncertain in breadth and scope, may only provide a partial offset. Given the weaker expected growth outlook, unemployment is also forecast to edge higher in many of our key markets in 2025. The exceptions are Hong Kong and mainland China, where government policies to support employment are expected to ensure unemployment remains stable. Inflation forecasts have risen in several of our key markets, particularly for 2025, with higher tariffs expected to exert renewed upward pressure on inflation, such that it is now forecast to remain above central bank targets in 2025-26 in both the UK and US. Interest rate forecasts for both markets imply that central banks will look through temporary price effects and engage in a moderate reduction in interest rates over the remainder of 2025. In Hong Kong, inflation is forecast to remain anchored to its long-term average throughout the forecast horizon. Lower inflation in mainland China has been driven by weak domestic demand, particularly consumption, and is forecast to remain low as domestic supply increases due to tariff constraints on trade. Consequently, in the Central scenario forecast, it is expected that there is greater scope for policymakers in mainland China to lower policy rates, given the subdued demand backdrop and low inflation environment. In mainland China and Hong Kong, real estate prices have continued to fall, reflecting high levels of inventory and weak buyer confidence, despite the delivery of supportive policy measures. Forecasts for both Hong Kong and mainland China anticipate that prices will decline throughout 2025 before recovering only gradually from 2026 onwards. House price growth forecasts in the UK and US envisage continued steady growth. In the UK, a moderate fall in rates is expected to improve