Hong Kong is set to revise upward its full-year economic growth forecast for 2026 following a stronger-than-expected expansion in the first half of the year, Financial Secretary Paul Chan Mo-po announced. Economic experts have suggested that gross domestic product (GDP) growth could reach as high as 4 percent.
In a weekly blog post, Chan highlighted that the Census and Statistics Department will update its GDP forecast later this month, prompted by a 5.1 percent year-on-year growth recorded in the city’s economy during the first six months of 2026. Previously, the government had projected growth between 2.5 and 3.5 percent for the entire year.
The financial chief attributed the upbeat momentum to continued robust global demand for artificial intelligence (AI) products, which are underpinning the goods export sector. Additionally, he pointed to sustained overseas demand for Hong Kong’s financial and business services, coupled with a recovery in tourist arrivals, as key drivers supporting growth in services exports, local consumption, and investment sentiment.
Despite the positive outlook, Chan cautioned that ongoing geopolitical tensions, fluctuations in US dollar interest rates, and other uncertainties could influence the economic trajectory. He emphasized the government’s commitment to maintaining vigilance and ensuring economic and financial stability while pursuing growth.
Supporting this optimistic scenario, Ryan Lam Chun-wang, head of research for Hong Kong at Shanghai Commercial Bank, projected economic growth for 2026 in the range of 3.5 to 4 percent. Lam noted that the strong export performance in AI-related goods and the city’s robust first-half results justified a raised forecast. He anticipated the second half of the year would see growth rates of around 2 to 3 percent.
Hong Kong’s equity market performance further bolstered the outlook. Chan highlighted that the benchmark Hang Seng Index surged approximately 3,000 points in July, marking its largest monthly gain in nearly two years. Meanwhile, average daily stock market turnover remained above HK$300 billion for two consecutive months. Fundraising activities also remained strong, with initial public offerings (IPOs) through July surpassing last year’s total by more than 13 percent and post-listing refinancing rising over 20 percent year on year.
In a related development, Hong Kong launched its first offshore Chinese government bond futures contract, a five-year product traded on the local stock exchange. Chan described the futures contract as unique in the offshore market, providing international investors with a standardized, liquid, and exchange-traded hedging tool denominated in renminbi. This marks a significant step in the city’s efforts to internationalize the renminbi and builds on the existing Bond Connect and Swap Connect cross-border trading mechanisms.
The new futures product aims to complete a risk management framework between cash and futures markets for Chinese treasury bonds, addressing growing investor demand for northbound asset allocation through Hong Kong-based trading channels.