Hong Kong: Economic growth picks up in the first quarter of 2026
GDP reading: Hong Kong’s GDP expanded 5.9% in annual terms in Q1, following 4.0% growth in the previous quarter and well above market expectations. Q1’s reading was the strongest since Q2 2021. The economy likely benefitted in the quarter from strong global demand for AI-related electronics, sustained growth in visitor arrivals and robust cross-boundary financial activities.
Drivers: Relative to the previous quarter’s data, figures in Q1 improved for private consumption (+5.0% in annual terms vs +2.5% in Q4), government consumption (+2.9% vs +1.5% in Q4), fixed investment (+17.7% vs +11.7% in Q4) and imports of services (+3.9% vs +3.7% in Q4). In contrast, the reading for exports of services softened in Q1 (+3.5% vs +4.7% in Q4).
On a seasonally adjusted quarter-on-quarter basis, economic output grew 2.9% in Q1, following a 1.1% expansion in the prior quarter.
Panelist insight: On outlook risks, United Overseas Bank’s Ho Woei Chen said:
“The AIdriven export and investment upcycle has so far cushioned the economic impact of ongoing conflicts in the Middle East. However, a prolonged shipping blockade in the Strait of Hormuz would pose increasing downside risks. Furthermore, higher energy and transportation costs could feed through to inflation, constraining household consumption, while tighter global financial conditions would likely weigh on asset markets through higher interest rates.”