Key facts
- IMF lifts Hong Kong growth forecast to 3.8% from 2.4%.
- Global growth forecast pared to 3.1% from 3.5%.
- US is now Hong Kong's fourth-largest export market by volume.
- Retail sales have grown for 14 consecutive months.
Hong Kong's Financial Secretary Paul Chan expressed cautious optimism about the city's economic outlook for the second half of 2026, citing robust first-half performance driven by strong exports and resilient domestic consumption. The International Monetary Fund has increased its projection for Hong Kong’s economic expansion this year to 3.8 percent, up from 2.4 percent, even as it pares global growth. Chan noted that retail sales have grown for 14 consecutive months and the catering sector has seen a modest uptick. Property and stock markets are showing stabilising signs with a positive bias, and the labour market remains healthy. Chan expects the economy to maintain steady momentum through year-end. However, he acknowledged external headwinds, particularly US trade policies and interest rate movements, as notable risks. The market currently expects one more rate hike of 0.25 percentage points, which has already been priced in. Chan believes the impact of the approaching US midterm elections on Hong Kong will be present but manageable. He highlighted the agility of mainland and Hong Kong firms in adapting to changing conditions, noting that the US is now ranked fourth in Hong Kong's export markets by volume. Chan also touched on geopolitical uncertainties, including the Middle East conflict, which already affected energy supplies in the first half of the year, and maintained that supply-chain disruptions and inflationary pressures are risks that are containable.