Hong Kong Economy Grows 5.2% in Third Quarter as Exports Jump 30.4%
Key Facts
Hong Kong’s real gross domestic product grew 5.2% year on year in the third quarter of 2026, according to the preliminary estimate released by the government on November 3. That followed growth of 4.2% in the second quarter, with the acceleration reflecting strength in exports and investment during the period. On a quarter-on-quarter basis, adjusted for seasonal factors, GDP rose 1.9% compared with the second quarter. The economy also grew 5.1% in the first nine months of the year, its fastest pace for that period in five years. The results reinforced the government’s assessment that full-year economic growth would be stronger than it forecast in its previous review.
External trade was the main driver of growth, with merchandise exports, measured according to national accounts concepts, rising 30.4% in real terms year on year in the third quarter. The increase accelerated from 28.9% in the second quarter, according to the government statement. The government said strong global investment in artificial intelligence is expected to continue supporting Hong Kong’s merchandise exports. Services exports also recorded real growth of 4.3% year on year, compared with an increase of 3.2% in the previous quarter. Services performance improved alongside the expansion in merchandise exports, although its growth remained much slower.
The improvement extended to domestic investment, with gross domestic fixed capital formation rising 7.3% in real terms year on year in the third quarter. It had increased 3.7% in the second quarter, meaning investment growth accelerated during the period. Real government consumption expenditure also rose 1.7% year on year, after remaining nearly flat in the previous quarter. But private consumption expenditure increased only 2.8%, compared with growth of 2.9% in the second quarter. The divergence between accelerating investment and moderate private consumption indicates that components of domestic demand did not move at the same pace.
Among domestic demand indicators, the value of retail sales rose 6.4% year on year in September, marking the seventeenth consecutive month of expansion, according to the government’s Census and Statistics Department. Before the GDP estimate was released, Financial Secretary Paul Chan said the value of merchandise exports jumped 64.9% in September from the same month a year earlier. He said exports had recorded double-digit growth for the twentieth consecutive month and that the monthly increase was the largest in more than 40 years. These indicators provide monthly context for the strength of trade and demand at the end of the quarter, while the quarterly export growth figure measures the real change over the full quarter. The government later raised its forecast for real GDP growth in 2026 to 4.8%, from a range of 3.5% to 4.5% in its August review, citing performance in the first three quarters and expectations that growth would continue in the fourth quarter.
On prices, the government said in its October statement that the Composite Consumer Price Index rose 1.9% year on year in September. Underlying inflation, after excluding the effects of the government’s one-off relief measures, was 2.1% that month, compared with 1.9% in August. The government attributed the increase to faster transport and travel prices. In its latest forecasts for 2026, the government’s Census and Statistics Department lowered its estimate for underlying inflation to 1.9% and headline inflation to 2.0%. Its estimates in the August review were 2.5% for underlying inflation and 2.6% for headline inflation. The downward revision to price forecasts therefore came alongside an increase in the annual growth forecast.
The government said strong global investment in artificial intelligence is expected to continue supporting merchandise exports, and it expects growth to continue in the fourth quarter. At the same time, it called for monitoring the possibility of renewed trade tensions and rising sovereign bond yields in major advanced economies amid high public debt levels. It also warned of a possible market correction if expectations for artificial intelligence prove overly optimistic. The government added that continued Middle East tensions, rising global inflation and the possibility of tighter monetary policy by major central banks warrant monitoring. These risks place the continuation of export momentum and growth in the coming months in an external context that could shift with trade, prices and monetary policy.