Hong Kong economy grows 4.3% on strong external trade, resilient domestic demand Hong Kong’s economy expanded by 4.3 per cent year on year in the second quarter of 2026, with the government expecting “solid growth” to continue for the remainder of the year. While growth was slower than the 5.9 per cent recorded in the first quarter, the government remained confident that export demand would continue to drive expansion for the rest of the year. “Looking ahead, the Hong Kong economy should continue to post solid growth in the second half of 2026,” the spokesman said. “Vibrant global demand for artificial intelligence-related products should bolster merchandise exports, while exports of services should benefit from sustained growth in visitor arrivals and steady demand for financial and business services. “Domestic demand is expected to stay firm, supported by stable labour market conditions, and solid business and consumer sentiment.” However, the spokesman said lingering external headwinds, particularly tensions in the Middle East, uncertainties surrounding the United States’ monetary policy and trade protectionist measures among major economies, warranted close surveillance. According to the advance estimates for gross domestic product (GDP) growth released by the Census and Statistics Department, the most notable increase in the second quarter was in total exports of goods, which rose by 28.8 per cent in real terms over a year earlier, surpassing the 23.8 per cent recorded in the first three months. Imports of goods grew by 29.3 per cent in real terms in the April to June span, compared with an increase of 29.9 per cent in the first quarter. The quarterly figures follow a strong performance in June, when exports rose by 53.4 per cent year on year to a record HK$641.1 billion (US$81.7 billion), marking the highest level of monthly growth since March 1984. Over the first half of 2026, total exports increased by 39.1 per cent compared with the same period last year. Domestic pillars continued to support broader GDP growth, with monthly arrivals reaching 3.72 million in June, up by 7 per cent from a year earlier, extending the steady post-pandemic recovery. Junyu Tan, regional economist for North Asia at trade credit insurance company Coface, attributed the weaker second-quarter growth to the continued volatility in the contribution of net exports to the economy and a slowdown in investment activity. Rising demand for critical microelectronics, bolstered by AI capital expenditure and defence spending, is driving up semiconductor prices and posing upside risks to global goods inflation, according to asset management firm BlackRock. Tan pointed out that residential property sales had softened amid uncertainty over the next move by the United States Federal Reserve. On Thursday, the Fed retained its target interest rate in the range of 3.5 to 3.75 per cent, with the Hong Kong Monetary Authority keeping its base rate unchanged at 4 per cent. He cautioned that higher Hong Kong interbank offered rates might weigh on asset prices and investment sentiment, while a pickup in Hong Kong dollar strength against the renminbi could dampen visitor spending. Coface predicted the economy would grow by 3.3 per cent this year and did not expect the government to rush to raise its forecast of 2.5 to 3.5 per cent expansion, Tan added. While lower land sale revenue would make the government more cautious in spending, support was lined up for Northern Metropolis infrastructure projects, as well as the AI and innovation and technology industries, Lee added. Leah Fahy, a senior China economist at Capital Economics, said contraction in investment growth was a key reason for the weakness in the latest GDP performance, falling by almost 8 per cent quarter on quarter. While export growth continued to increase, the expansion was offset by a larger surge in imports, resulting in a net drag on GDP growth, she wrote. But the weaker second-quarter performance did not suggest that Hong Kong’s broader recovery was in jeopardy, she added. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3362538/hong-kong-economy-grows-43-strong-external-trade-resilient-domestic-demand?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post