Standard Chartered Bank has lifted its 2026 Hong Kong economic growth forecast to 4.3 percent to 3.2 percent on a strong first-quarter performance.
A resilient mainland economy should help underpin financial market activity and inbound tourism in Hong Kong, and an improved sentiment in the stock and housing markets, as well as a stable labor market, should help the domestic demand recovery, the bank’s economist wrote in a note on Wednesday.
The AI supercycle is also benefiting Hong Kong, as the city serves as a re-export hub between China, the rest of Asia, and other parts of the world, the lender said, adding that these factors should more than offset the impact of higher costs and likely slower global growth due to the Middle East conflict.
Hong Kong logged a 5.9 percent expansion in gross domestic product in the first quarter of 2026, marking the best performance in five years.
Standard Chartered also raised its 2026 headline inflation projection for the city, seeing the reading rise to 2.1 percent from 1.5 percent it previously expected, due to higher energy, imported input prices, and rising wages amid strong economic performance.
The bank expects Hong Kong interbank offered rates to rise further, with the mortgage-linked one-month Hibor hovering around 2.8 percent and the three-month figure around 3 percent in the second half of this year.
