HK recovery uneven despite high GDP: economist

Economist Ho Lok-sang said Hong Kong's third-quarter GDP growth has boosted confidence, but the recovery remains uneven. The city's economy expanded 5.2 percent year-on-year in Q3 2026, with prime office spaces showing strong recovery, particularly in Grade A, centrally located locations. However, demand for commercial properties outside these prime areas remains weak, and a broader recovery will likely depend on lower rents.

Ho expects full-year growth to be quite strong, possibly above 4 percent. The financial sector is performing exceptionally well, with IPOs at a high level and exports also doing well. Yet, persistent weaknesses persist in construction demand, retail consumption, and the restaurant business. Support for these sectors may come from major events and tourism.

Goods exports rose 30.4 percent in Q3 due to demand for AI and electronics, while services exports grew 4.3 percent thanks to tourism and financial activities. However, private consumption growth slowed to 2.8 percent, lagging behind other sectors. Despite first-nine-month growth of 5.1 percent, Shui forecasts four to five percent growth for the fourth quarter and around five percent for the full year, exceeding the government's forecast.

He cautioned that interest rates could hinder business investment and household spending, and unemployment at 3.9 percent suggests that consumption still needs job and income support. For a sustained recovery, Shui believes exports must remain strong, while consumption and employment need to improve.