Income Growth Expectations Tempered by Economic Uncertainties Among Hong Kong Consumers

Balancing short-term challenges with long-term financial goals to build resilience

• Prevailing economic uncertainties prompted cautious income growth expectations across generations over the next 12 months
• Inflation of everyday goods, economic slowdown and job security were the top three concerns affecting household finances cited by consumers
• More consumers planned to apply for or refinance credit, but accessibility gaps remained especially for older cohorts

Global information and insights company and Hong Kong’s leading credit reference agency, TransUnion (NYSE: TRU), today released its Consumer Pulse Study for Q2 2025. The report revealed that financial confidence among Hong Kong consumers remained cautious and hard-earned. In the face of a complex economic environment, consumers were adjusting their budgeting behaviours through a dual-track approach of short-term caution with long-term planning to enhance financial resilience. While consumers exhibited a greater appetite for credit during times of uncertainty, perceived access still varied by generation, with Gen Z feeling better served than the older cohorts.

Macroeconomic uncertainties likely hampered confidence in income growth prospects

In Q2 2025, 44% of surveyed consumers in Hong Kong reported an increase in income over the past three months, which is a significant improvement from 29% recorded in the same period last year. This upward trend was observed across all generations (Gen Z, Millennials, Gen X, and Baby Boomers)¹, with Gen Z leading the way as 56% reported an income boost, marking a substantial year-over-year (YoY) increase of eleven percentage points.

However, confidence in future income growth appeared to have been dampened by macroeconomic uncertainties. Fifty-two percent of Hong Kong consumers anticipated that their income would either remain the same or decrease over the next 12 months. When asked about their top financial concerns during the same period, many cited the ongoing global tariff war.

This cautious sentiment was particularly prevalent among Millennials, Gen X, and Baby Boomers. In stark contrast, 60% of Gen Z consumers expected their income to increase in the year ahead, reflecting that financial progress remained evident within certain segments, which are often led by younger earners carving their own paths.

Financial pressures drove strategic budget adjustments among consumers

According to the study, respondents saw inflation of everyday goods (57%), economic slowdown (55%), and job security (54%) as the biggest concerns affecting household finances over the next six months. These concerns reflect the rise in the territory’s inflation rate during the first five months of the year², and the upward trend in unemployment since February 2025³. Against this economic backdrop, nearly a quarter (24%) of consumers anticipated difficulties in paying at least one of their current bills and loans in full, up from 20% a year ago.

Alongside financial uncertainties, a notable shift in household budgeting behaviour was observed. Over the past three months, 39% of consumers reported cutting back on discretionary spending such as dining out and travelling, indicating a short-term solution to immediate potential financial pressures. Meanwhile, 39% reported saving more for emergencies, 25% increased retirement contributions, and 20% accelerated debt repayment, reflecting a focus on long-term financial resilience.

While challenges remain, the local market continues to exhibit some encouraging signs, including heightened activity in the property sector and significant growth in the stock exchange, particularly with a rebound in IPO activities⁴. Additionally, interest rates in Hong Kong are projected to stay low, and further US interest rate cuts⁵ are anticipated in the second half of 2025.

“Despite ongoing economic uncertainties, Hong Kong consumers are demonstrating a pragmatic and resilient mindset, balancing short-term caution with long-term financial planning. It is clear that consumers are adapting to financial uncertainties through prudent strategies such as increased emergency savings and accelerated debt repayment, which are likely to foster greater financial resilience,” said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion. “These insights underscore the importance of tailored financial solutions that support consumers across generations as they navigate an evolving economic landscape.”

Credit inclusion improved but access and ease still trail behind demand

In addition to cautious financial strategies, consumers increasingly saw access to credit as essential for achieving financial mobility, particularly during times of uncertainty. A strong majority (96%) agreed that credit and lending product access is important for achieving their financial goals. This sentiment was reflected in consumers’ borrowing intentions, with 42% planning to apply for or refinance credit in the coming year, up from 30% in Q2 2024. While demand is expected to grow further as interest rates decline, a notable increase in credit interest was seen among older cohorts, as Gen X (45%) and Baby Boomers (28%) showed increasing intention to seek new credit over the past five quarters.

Despite rising demand, less than half of Gen X and Baby Boomers (48% and 44% respectively, compared to 55% overall) believed that they have sufficient access to credit and lending products, indicating that access barriers remain. Additionally, 42% of consumers ultimately abandoned their credit application or refinancing plans, primarily due to high costs (30%), burdensome processes (30%), and long decision times (28%). These challenges present clear opportunities for lenders to enhance the overall credit journey and better serve unmet demand.

Adding to this, while 63% of consumers believed they would be approved for a credit or lending product when needed, more than one quarter (27%) still did not know their credit score. This gap underscores how limited credit awareness may hinder consumers’ efforts to maintain credit health and potentially lead to misconceptions about their financial readiness.

“The vast majority of consumers view credit as essential to achieving their financial goals and they plan to engage with credit more than ever in the year ahead,” said Sun. “Yet, a noticeable gap remains between demand and perceived access, with older generations reporting greater challenges. To bridge this gap, lenders could streamline processes and design more inclusive solutions that reflect the diverse needs across age groups. At the same time, with over one in four consumers unaware of their credit score, it is clear that improving credit awareness and encouraging proactive credit health management are critical in helping them to unlock more financial opportunities.”

TransUnion’s Q2 2025 Consumer Pulse Study consisted of a survey of 968 adults 18 years of age and older residing in Hong Kong between 5 May and 15 May 2025. This quarterly study examines shifting consumer attitudes and behaviours based on the dynamics of income, debt, and identity theft. For more information, please view the full Consumer Pulse Study Q2 2025 Report.

¹ Generations are defined in this research as follows: Gen Z, 18–26 years old; Millennials, 27–42 years old; Gen X, 43–58 years old; and Baby   Boomers, age 59 and above

² Census and Statistics Department: Consumer Price Indices for May 2025

³ news.gov.hk: Jobless rate rises to 3.5%

⁴ The Hong Kong Monetary Authority: Recent dynamics in the Hong Kong dollar market

⁵ The Hong Kong Monetary Authority: HKMA’s Response to US Fed’s Interest Rate Decision