Hong Kong maintained its 2.5 percent – 3.5 percent economic growth forecast for 2026 as the potential near-term headwinds in the external environment risk offsetting a stronger-than-expected reading in the first quarter.
The city’s gross domestic product grew by 5.9 percent in the first quarter, the same as the advance estimate, driven by the sustained strong performance in external trade and pick-up in domestic demand, the government said on Friday.
The government also raised the forecasts for the underlying and headline consumer price inflation rates for 2026 to 2.5 percent and 2.6 percent, respectively, up from 1.7 percent and 1.8 percent it previously projected.
The feed-through of higher international oil prices to fuel-related components in consumer prices should continue in the coming months, it said.
The underlying inflation rose 1.4 percent in the first quarter.
Looking ahead, strong global demand for advanced electronics and AI‑related products is expected to support goods export performance, while services exports should remain firm, underpinned by sustained vibrancy in inbound tourism, robust cross-boundary financial activity, and steady demand for business services, the government said.
Relatively solid consumer sentiment and resilient business outlook are expected to support domestic demand, it said.
Yet, the outlook of the Middle East conflict remains highly uncertain, it noted, adding that a further escalation or persistence of tensions could heighten global financial market volatility, posing downside risks to growth and upside risks to inflation.
