The Government reported that Hong Kong's economy expanded robustly in the first quarter of 2026, with real gross domestic product (GDP) rising 5.9% year-on-year, the strongest in nearly five years.

Releasing the First Quarter Economic Report 2026 today, the Government noted that the economy in the first quarter was driven by the sustained strong performance in external trade and pick-up in domestic demand, accelerating from the 4% growth in the preceding quarter.

On a seasonally adjusted quarter-to-quarter basis, real GDP rose rose notably by 2.9%.

Underpinned by sustained global demand for artificial intelligence (AI)-related electronic products and buoyant regional trade flows in Asia, total exports of goods grew markedly by 23.7% year-on-year in real terms in the first quarter.

Exports of services continued to expand solidly by 3.5% in real terms over a year earlier, with broad-based growth across all major service groups.

Domestically, private consumption expenditure saw accelerated growth of 4.9% in the first quarter, while overall investment expenditure continued to expand at a double-digit rate of 17.7% year-on-year in real terms.

Looking ahead, the Government noted that Hong Kong's economic outlook remains broadly resilient. Sustained global demand for AI-related investment and products presents an upside risk to growth. Yet, the Middle East conflict remains highly uncertain, poses downside risk to growth and upside risk to inflation.

Taking into account the stronger-than-expected outturn in the first quarter and the potential near-term headwinds in the external environment, the real GDP growth forecast for 2026 as a whole is maintained at 2.5% to 3.5%, the same as that announced in the Budget.

Meanwhile, the forecast for the underlying inflation rate for 2026 is revised up to 2.5% from 1.7%.