Govt raises full-year GDP growth forecast to 4.8pc

The Hong Kong government announced on Friday that it has raised its full-year GDP growth forecast for 2026 to 4.8 percent, up from the previous forecast range of 3.5 to 4.5 percent. This increase comes after the city experienced robust economic expansion in the third quarter and is expected to maintain solid growth in the final three months of the year.

Government Economist Irina Fan revealed that the economy expanded by 5.2 percent year-on-year in the third quarter, surpassing the 4.2 percent growth in the previous quarter. She emphasized that the economy grew by 5.1 percent over the first nine months of the year compared to the same period last year, marking the fastest pace in five years.

Fan attributed the strong performance to robust global AI investment and related trade, foreseeing sustained growth momentum as incoming data for the fourth quarter also indicates positive trends.

Three key drivers of the Hong Kong economy – exports, investment, and consumption – have continued to grow, while the labour market has remained stable, with employment earnings increasing year-on-year. Fan noted that consumer price inflation has been lower than expected, despite the potential for higher oil prices to persist, which should keep inflation moderate overall. She revised down the forecast for underlying consumer price inflation rate for 2026 to 1.9 percent from the earlier estimate of 2.5 percent.

Fan stressed that the government will continue to monitor external risks, including geopolitical tensions, US monetary policy, and trade protectionist measures, which warrant closer observation.