HSBC raises HK 2026 GDP forecast to 3.8pc

HSBC Global Investment Research has raised its GDP forecasts for 2026 and 2027 from 2.7 percent and 2.8 percent to 3.8 percent and 3 percent respectively, citing the economy's robust performance in the first quarter.

According to the report released on Thursday, Hong Kong's economy grew by 5.9 percent year-on-year in the first quarter, marking the highest in nearly five years. With stable local economic growth, the direct impact of the Middle East conflict is expected to be relatively limited.

The report noted that Hong Kong's energy is almost entirely dependent on imports, with a large portion coming from mainland China and only a small portion from the Middle East. The government has also implemented support measures such as fuel subsidies and tunnel toll reductions to mitigate some of the impact.

It pointed out that the booming demand driven by AI and the recovery of trade with the mainland, may become a key buffer for trade this year. But if the impact of the Middle East conflict continues and dampens global demand, there is a downside risk.

Meanwhile, Hong Kong's role as a safe harbour attracts capital seeking stability, and its interconnectedness further draws in funds and talent. The residential property market continues its strong recovery, the wealth effect is boosting consumption, and the job market is also improving, according to the report.

 

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