Hong Kong: Growth outlook improves – UOB

UOB economist Ho Woei Chen reports that Hong Kong’s Gross Domestic Product (GDP) growth accelerated sharply in 3Q26, driven by strong goods exports and investment. Chen highlights support from the semiconductors and AI supply chain, a stabilising property market and rising tourist arrivals. UOB revises its Hong Kong GDP forecasts higher for 2026 and 2027, while flagging external and financial risks.

Stronger GDP and revised forecasts

"Hong Kong’s GDP growth accelerated to 5.2% in 3Q26 from a revised 4.2% in 2Q26 (Bloomberg est: 3.7%, UOB est: 3.0%). On a seasonally adjusted q/q basis, GDP surged 1.9%, rebounding sharply from a contraction of 0.7% in 2Q26."

"The outperformance in 3Q26 was driven by goods exports (+30.4% y/y) and gross domestic fixed capital formation (+7.3% y/y). Growth in private consumption (+2.8% y/y) remained steady and government consumption (+1.7% y/y) improved."

"The semiconductors trade and Hong Kong’s role in the broader global AI supply chain continued to underpin the city’s economic growth. Domestically, consumer sentiment has softened due to uncertainties in the Middle East, rising interest rates and tighter mainland scrutiny over capital outflows. Nonetheless, the stabilising property market and improving tourist arrivals provided a cushion."

"This continued to support the recovery in retail sales. Despite moderating, retail sales value continued into its 17th consecutive month of growth in Sep."

"Factoring in the strong growth rebound in 3Q26, we revise higher our GDP growth forecasts to 5.0% (from 3.9%) for 2026 and 3.0% (from 2.4%) for 2027. The growth in 2026 will be the strongest since the post-pandemic rebound to 6.5% in 2021."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)