Govt raises full-year GDP growth forecast

The Hong Kong government recently revised its full-year GDP growth forecast upwards to 3.5 to 4.5 percent for 2026, thanks to a strong first half of the year. This optimistic outlook follows the city's impressive 5.1 percent growth in the first six months, the best performance in nearly five years. The economy saw a 4.3 percent increase in the second quarter, building on a 5.9 percent jump in the first three months.

Government Economist Irina Fan attributed the improved forecast to robust global demand for technology and AI-related products. She emphasized that the economic outlook remains positive, but stressed the need to closely monitor geopolitical tensions in the Middle East, their potential impact on energy markets and global inflation, as well as the trade protectionist measures among advanced economies.

Fan also noted the varying performance among sectors, with exports surging 28.9 percent in the second quarter and 23.8 percent in the prior three months, while private consumption expenditure growth slowed to 2.8 percent between April and June.

In terms of inflation, the government anticipates rising consumer prices in the coming months due to the persistent surge in international oil prices. However, it expects price pressures in other areas to remain largely contained. The forecast for both underlying and headline consumer price inflation remains at 2.5 percent and 2.6 percent, respectively.