Hong Kong GDP growth slows to 4.3% despite AI exports

Hong Kong's economy grew 4.3% in the second quarter of 2026, official advanced data showed Friday, slowing from the first quarter despite a surge in exports linked to global demand for artificial intelligence products.

The figure was down from 5.9% growth in the first three months of the year, which was the city's best quarterly performance since 2021. It was also below the 4.9% expected by economists surveyed by Bloomberg.

Authorities said robust external trade and resilient domestic demand supported growth, which was still above the government's annual target range of 2.5% to 3.5% for 2026.

Total goods exports rose 28.8% from a year earlier in the second quarter, accelerating from 23.8% growth in the first quarter. Goods imports grew 29.3%, while private consumption expenditure rose 2.9%.

On a seasonally adjusted basis, gross domestic product fell 0.6% from the previous three months, a government spokesperson said.

The spokesperson said Hong Kong faced headwinds from Middle East tensions, uncertain US monetary policy and trade protectionist measures among major advanced economies. The spokesperson also said demand for AI-related products should support merchandise exports in the second half of the year.

Hong Kong's currency is pegged to the US dollar, leaving the Chinese financial hub exposed to the effects of US monetary policy. The Federal Reserve held US interest rates steady on Wednesday.