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Wynna Wong

Denise Tsang

The Hong Kong government has maintained its full-year growth forecast at between 2.5 and 3.5 per cent after the city’s economy expanded by a stronger-than-expected 5.9 per cent in the first quarter.
But rising oil prices linked to the war in the Middle East could push inflation higher in the coming months, the government economist warned as the Census and Statistics Department released growth data on Friday.
The economy grew by 5.9 per cent year on year in the first quarter, after expanding by 4 per cent in the previous three months.
The figure was the same as the advance estimate released by the government last week, when authorities said the 5.9 per cent expansion was the fastest for a three-month period in nearly five years.
The economy grew by 3.5 per cent in 2025, marking the third consecutive year of expansion.
The government also raised its headline inflation forecast for 2026 to 2.6 per cent, up from 1.8 per cent projected in February’s budget, citing higher international energy prices.
“Looking ahead, Hong Kong’s economic outlook remains broadly resilient,” said Government Economist Irina Fan Yuen-yee.
“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.”
Fan added that firmer domestic demand was supported by “solid consumer sentiment and resilient business outlook”, but warned that the impact of the Middle East war remained uncertain.
The threat of escalation or persistent tensions posed downside risks to growth and upside risks to inflation, she said.


Junyu Tan, regional economist for North Asia at trade credit insurer Coface, said Hong Kong was mainly benefiting from the AI boom through its traditional role as a transfer hub for high-end electronics.
“It is mainly re-exports, and Hong Kong has traditionally served as a key re-export hub for high-end electronic goods like chips produced in mainland China,” he said.
“Because these products may involve warranty liabilities, foreign buyers often prefer contracts to be governed by Hong Kong law, which they view as more aligned with global standards.”
Officials also said that inflationary pressures from higher fuel costs were expected to continue in the coming months, although stable energy supplies from the mainland would help mitigate some external shocks.
Terence Chong Tai-leung, an economics professor at the Chinese University of Hong Kong, said the government could eventually revise its full-year growth forecast to as high as 4 per cent if current momentum continued.
Inflationary pressures could also intensify in the second half of the year, he warned.
“Inflation will rise after June when electricity fee starts to increase,” he said. “But generally it should be lower than 4 per cent overall.”
According to the latest figures, total exports of goods surged by 23.7 per cent year on year in real terms, driven by sustained global demand for artificial intelligence-related electronic products and stronger regional trade flows in Asia.
Private consumption expenditure also accelerated, rising by 4.9 per cent against the same period last year in real terms, while overall investment expenditure expanded by 17.7 per cent.
The seasonally adjusted unemployment rate edged down to 3.7 per cent, from 3.8 per cent.
The number of tourist arrivals in Hong Kong grew by 10 per cent year on year in April, bolstered by the city’s annual Sevens rugby tournament.

The Tourism Board revealed on Friday that the city welcomed 4.21 million visitors in April, taking the total in the first four months to 18.52 million – a 15 per cent jump over the same period last year.
While most visitors recorded last month were from the mainland, the number from the rest of the world also saw notable growth, rising by 8 per cent to 1.11 million, year on year.
Non-mainland visitors in the first four months of 2026 also grew by 8 per cent year on year to 4.34 million.
The Hong Kong Sevens tournament was held at the 50,000-seat Kai Tak Stadium over three days in early April.
The board said it would continue to monitor the ongoing United States-Israel war with Iran to gauge its effect on local tourism.
“The Hong Kong Tourism Board will closely monitor the latest developments in the Middle East and their impact on air traffic capacity and the tourism market,” it said.


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Hong Kong maintains 2026 growth forecast at 2.5% to 3.5%

Tourists at the Tsim Sha Tsui waterfront during the Easter holiday in April. Photo: Eugene Lee

Tourist arrivals rose 10 per cent year on year in April, driven in part by the Hong Kong Sevens. Photo: Elson Li

Hong Kong draws over 1 million mainland ‘golden week’ visitors but spending lags

Shoppers at a jewellery shop on Canton Road in Tsim Sha Tsui on the first day of mainland China’s “golden week” Labour Day holiday. Photo: Jelly Tse

Annie Tse, chairwoman of the Hong Kong Retail Management Association, says consumption was largely confined to traditional tourism districts. Photo: Dickson Lee

‘Golden week’: Hong Kong draws more mainland Chinese visitors but spending uneven

Mainland Chinese tourists pack Sai Kung’s renowned seafood restaurants. Photo: Dickson Lee

Timothy Chui says he saw visitors with camping gear checking into a five-star hotel on Sunday. Photo: Dickson Lee

Hong Kong posts strongest quarterly economic growth in almost 5 years at 5.9%

The 5.9 per cent quarterly economic expansion is also the strongest since the 7.6 per cent growth seen in the second quarter of 2021. Photo: Nora Tam

Financial Secretary Paul Chan has attributed some of the growth to a 17 per cent year-on-year rise in visitor numbers in the first quarter. Photo: Eugene Lee

News

Hong Kong

Hong Kong Economy

Government also raises headline inflation forecast for year to 2.6 per cent, up from 1.8 per cent projected in February’s budget


Government also raises headline inflation forecast for year to 2.6 per cent, up from 1.8 per cent projected in February’s budget.


China

Iran

Hong Kong Tourism Board

Hong Kong maintains 2026 growth forecast at 2.5% to 3.5%

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Government also raises headline inflation forecast for year to 2.6 per cent, up from 1.8 per cent projected in February’s budget

Government also raises headline inflation forecast for year to 2.6 per cent, up from 1.8 per cent projected in February’s budget