Company: HBCYF
Filing Date: 2025-04-29
Form Type: 6-K
Source: 0001089113-25-000046
Chunk: 42

Company: HSBC HOLDINGS PLC
Filing Date: 2025-04-29
Form: 6-K
Chunk 42
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 affordability, while in the US, low housing supply and low unemployment have acted to support price growth. Risks to the Central scenario outlook are captured in the outer scenarios. The Upside and Downside scenarios are constructed to reflect the economic consequences from the crystallisation of a number of key economic and financial risks. Sources of forecast uncertainty include tariff policy and the rates at which tariffs are levied, geopolitical tensions, inflation and the outlook for monetary policy. The Downside scenarios explore the possibility that tariff actions escalate, leading to lower GDP growth but higher inflation and interest rates than is forecast in the Central scenario. As the trade policy environment remains volatile and complex, risks include broader and more severe global retaliatory actions, beyond tariffs. Escalation of geopolitical tensions remains a risk amid ongoing conflicts in the Middle East and between Russia and Ukraine, alongside heightened tensions between the US and China over a range of strategic issues. Further escalation of these tensions could lead to more adverse outcomes for global trade growth and supply chains, leading to greater trade frictions, higher costs and financial market instability.

| 42 | HSBC Holdings plcEarnings Release 1Q25 on Form 6-K |

Earnings Release – 1Q25

The four global scenarios used for calculating ECL at 31 March 2025 were: – The consensus Central scenario: This scenario features a slowdown in global growth in the near term, due to the implementation of higher tariffs as well as underlying structural weakness in some economies, before a gradual pick-up over the remainder of the forecast horizon. Growth rates are projected to remain below the average growth rate over the five-year period prior to the onset of the pandemic. Unemployment is forecast to rise gradually amid weaker economic activity, but is set to remain low by historic standards. Inflation is expected to increase temporarily in several of our main markets as a result of tariffs. The main exceptions are Hong Kong and mainland China, where inflation is expected to remain subdued, despite higher tariffs, due to weak domestic demand. Interest rates are forecast to remain at a higher level than in recent years. – The consensus Upside scenario: This scenario incorporates a de-escalation in tariff actions, deregulation, and a reduction of supply constraints. It is also consistent with the reduction in geopolitical tensions, such as the achievement of durable settlements of regional conflicts. In this scenario growth accelerates, inflation falls at a faster rate than in the Central scenario and unemployment declines. This would enable central banks to lower interest rates more quickly than in the Central scenario. Asset prices