Paul Chan Forecasts Hong Kong 1Q26 Econ Growth Exceeding 4%, Strongest in Nearly Five Years

Financial Secretary Paul Chan said in a blog that, as private consumption continues to improve, together with sustained growth in exports and fixed investment, the advance estimate of Gross Domestic Product for 1Q26 to be released this week will accelerate further from the revised 4% growth in 4Q25, marking the strongest quarterly growth in nearly five years.He noted that Hong Kongs exports maintained strong performance in 1Q26, rising 32% in value terms and recording growth for 25 consecutive months, representing the best quarterly performance in five years. By destination, amid a profound restructuring of regional production and supply chains, the value of Hong Kongs exports to Mainland China and ASEAN increased by nearly 35% and 38% respectively. Exports to the US and the European Union also rose by over 47% and 15% respectively.Paul Chan said that during the Golden Week period, Hong Kongs business sentiment remained positive. According to Immigration Department data, more than 602,000 visitors entered Hong Kong through various control points in the first two days of May, up 6% YoY. Visitor arrivals to Hong Kong in 1Q26 accelerated further to a 17% YoY increase, exceeding 14.3 million, setting another post-pandemic quarterly high. For the full year, visitor arrivals may surpass the original estimate of 53.8 million. Total inbound tourism-related spending for the year is expected to exceed HKD240 billion, representing a 9.5% increase from last year. These factors will reinforce the continued improvement of the local retail and catering sectors and provide ongoing support to overall economic growth and employment.He added that the government is closely monitoring the impact of the Middle East situation and rising international oil prices on relevant industries, small and medium-sized enterprises, and the overall economy. Considering that operating expenses have risen for sectors with a relatively high share of fuel costs, such as the transportation industry, the government has announced multiple short-term and targeted measures totaling about HKD2 billion. In addition, to assist local small and medium-sized enterprises in coping with the current volatile market environment, the government has requested the Hong Kong Monetary Authority to work with the banking sector to launch a new round of support measures, including increasing dedicated funds reserved for small and medium-sized enterprises, providing credit support to affected industries, and introducing flexible loan repayment arrangements.This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation.