Hong Kong holds reserves worth a full year of GDP — and fails the textbook debt test
At the end of 2025 Hong Kong's official foreign currency reserve assets equalled 100.1% of GDP, the highest ratio in the region. On the classic Guidotti–Greenspan test the same market reads 289.2%, which would be a warning anywhere else. Both numbers are true, and this note explains why.
How large are Hong Kong’s reserves relative to the economy?
They are equal to about one year of it. At the end of December 2025 official foreign currency reserve assets were US$427,934 million, and 2025 GDP was US$427.31 billion, so reserves were 100.1% of GDP (HKMA; IMF World Economic Outlook).
That is the highest ratio among the nine markets compared here.
How large are Hong Kong’s reserves relative to the economy?
Reserves ÷ GDP
Shared linear scale from zero. Selected entries from the table below. Its dates, units, definitions and limitations still apply.
| Market | Reserves, end-2025 (US$ m) | GDP 2025 (US$ bn) | Reserves ÷ GDP |
|---|---|---|---|
| Hong Kong | 427,934 | 427 | 100.1% |
| Singapore | 409,276 | 604 | 67.8% |
| Taiwan | 602,550 | 920 | 65.5% |
| Thailand | 281,872 | 577 | 48.9% |
| Japan | 1,369,775 | 4,435 | 30.9% |
| Malaysia | 125,532 | 472 | 26.6% |
| Philippines | 110,833 | 487 | 22.8% |
| Indonesia | 156,471 | 1,446 | 10.8% |
By July 2026 Hong Kong’s reserves had risen 4.7% to US$447,868 million.
Each authority publishes reserves on its own definition and these are not interchangeable. Hong Kong reports official foreign currency reserve assets; Japan, Singapore, Malaysia and Indonesia report official reserve assets; Thailand and the Philippines report gross international reserves; Taiwan reports foreign exchange reserves, which exclude gold, SDRs and the IMF reserve position. No figure here has been converted from one definition into another. GDP for 2025 is an IMF World Economic Outlook estimate, not a final outturn.
Can those reserves cover the short-term external debt?
Not on the arithmetic, and that is the point worth understanding. The Guidotti–Greenspan benchmark says a market should be able to cover all external debt falling due within a year out of reserves, which means a ratio of 100% or less.
| Market | Short-term external debt, end-2025 (US$ m) | ÷ reserves |
|---|---|---|
| Singapore | 1,525,406 | 372.7% |
| Hong Kong | 1,237,709 | 289.2% |
| Japan | 3,320,148 | 242.4% |
| Malaysia | 146,852 | 117.0% |
| Korea (reference) | 179,355 | 41.1% |
| Taiwan | 222,212 | 36.9% |
| Indonesia | 46,850 | 29.9% |
| Thailand | 70,893 | 25.2% |
| Philippines | 20,233 | 18.3% |
Read as a pass-or-fail test, this table says the four safest-looking economies in Asia are in trouble and the three that actually collapsed in 1997 are fine. That reading is wrong, which tells you the test is measuring something different in different places.
What the ratio actually measures here
In Hong Kong the numerator is not a government’s refinancing need. It is the cross-border liabilities of an international banking centre: deposits placed here by non-residents, and interbank funding raised abroad. Those liabilities sit against corresponding external assets that this ratio does not show, and they belong to banks rather than to the public sector.
For Thailand, the Philippines and Indonesia, the same line means something closer to what the benchmark was designed for. That is why their numbers moved so far after 1997 while Hong Kong’s stayed high for structural reasons.
The practical reading for someone here is that a single ratio cannot tell you whether an economy is exposed. You need to know what sits in the numerator. In a banking centre, a rising short-term external debt figure can mean the banking system is growing, not that the territory is borrowing.
Hong Kong operates a Linked Exchange Rate System, so the reserves backing the Monetary Base serve a purpose that floating-rate markets do not have: they underwrite a fixed convertibility undertaking rather than a discretionary intervention policy ([HKMA](https://www.hkma.gov.hk/eng/key-functions/money/linked-exchange-rate-system/)). That is one reason the reserves-to-GDP ratio here is the highest in the comparison. This paragraph interprets the arrangement; the figures in the tables are observations from the published statistics.
What to check when reading these numbers
Start with the definition. Four different reserve concepts appear in the tables above and they are labelled for that reason. Two figures are only comparable when they carry the same label.
Then check the maturity concept. The short-term external debt used here is measured by original maturity of one year or less, which is what the Quarterly External Debt Statistics publish. The Guidotti–Greenspan benchmark was framed around remaining maturity, which is a different and usually larger number. The two should not be swapped.
Finally check the reference date. Reserves here are end-December 2025 so they line up with the debt figure for the same quarter; the July 2026 figure quoted in the text is a later observation and is not mixed into the ratio tables.
Questions & answers
How large are Hong Kong's foreign reserves?
US$427,934 million at the end of December 2025, and US$447,868 million at the end of July 2026, a rise of 4.7%. The end-2025 figure equals 100.1% of 2025 GDP, the highest reserves-to-GDP ratio among the nine Asian markets compared here.
Does Hong Kong pass the Guidotti–Greenspan test?
No, and that is expected for a financial centre. The benchmark asks that reserves cover all short-term external debt, which means a ratio of 100% or less. Hong Kong's short-term external debt was 289.2% of reserves at the end of 2025, and Singapore's was 372.7%. The measure was not designed for markets whose external debt is mostly interbank.
Why is Hong Kong's short-term external debt so large?
Because it counts the cross-border liabilities of an international banking centre, not a government's borrowing. Deposits placed in Hong Kong by non-residents and interbank funding both appear in the same total. They are matched by corresponding external assets, which this ratio does not show.
Are the reserve figures in this note comparable across markets?
Only with care. Each authority publishes on its own definition. Hong Kong reports official foreign currency reserve assets, Japan, Singapore, Malaysia and Indonesia report official reserve assets, Thailand and the Philippines report gross international reserves, and Taiwan reports foreign exchange reserves excluding gold. The definitions are named in the tables and are not converted into one another.