Underpinned by buoyant external trade and resilient domestic demand, Hong Kong’s economy continued robust expansion in the second quarter of the year, with real gross domestic product (GDP) growing by 4.3% year on year, though it fell slightly by 0.6% on a seasonally adjusted quarter-on-quarter basis. For the first half of 2026, GDP rose 5.1% over a year earlier, making it the strongest half-yearly performance in nearly five years.

Government Economist Irina Fan announced the figures as she presented the Half-yearly Economic Report 2026.

Dynamic trade flows, driven by strong global demand for electronic products related to artificial intelligence (AI), propelled Hong Kong’s total exports of goods to a year-on-year increase of 28.9% in the second quarter. Exports of services expanded solidly by 3.4% in real terms over a year earlier, with all major service groups continuing to expand.

Domestically, private consumption expenditure rose firmly by 2.8% in real terms year on year, marking the fifth consecutive quarter of expansion.

Consumer price inflation rose slightly but stayed moderate, with the underlying Composite Consumer Price Index (CCPI) rising by 1.7% over a year earlier and the headline CCPI increasing by 1.9% year on year.

On the inflation front, as the earlier surge in international oil prices continues to feed through, overall inflation is expected to pick up in the coming months. The forecasts for the underlying and headline consumer price inflation rates this year remain at 2.5% and 2.6% respectively.

The Hong Kong economy should see solid growth in the second half of 2026, Ms Fan said.

The vibrant global demand for AI-related electronic products is expected to continue supporting Hong Kong's merchandise trade performance, and related logistics services should benefit from this momentum as well. Domestic demand is expected to stay firm, supported by stable labour market conditions, and solid business and consumer sentiment.

Nonetheless, external headwinds persist. Geopolitical tensions in the Middle East remain fluid, with potential spillovers to energy markets and global inflation. Inflation dynamics in major economies, the policy trajectories of major central banks, and trade protectionism among advanced economies warrant close attention. Risks associated with the rapid expansion of global AI investment also require monitoring.

Taking into account the stronger-than-expected actual outturn in the first half of this year and the near-term outlook, Hong Kong’s real GDP growth forecast for 2026 as a whole has been revised up to 3.5% to 4.5%.