Hong Kong: Q2 GDP growth slowed but remained healthy

Research evidence excerpt

Hong Kong: Q2 GDP growth slowed but remained healthy

Global Markets Research

31 July 2026Asia Insights

Economics - Asia ex-Japan

Research AnalystsHong Kong: Q2 GDP growth slowed but remained

Asia Economicshealthy

Harrington Zhang - NIHK

Preliminary data released by the C&SD show that Hong Kong's real GDP growth harrington.zhang@nomura.com

moderated to 4.3% y-o-y in Q2 from 5.9% in Q1, below market expectations (Consensus: +852 2252 2057

4.9%; Nomura: 5.2%). On a sequential, seasonally adjusted basis, GDP growth turned Ting Lu - NIHK

negative to -0.6% q-o-q in Q2, from 2.9% in Q1. Private consumption expenditure ting.lu@nomura.com

remained the primary driver of growth in Q2, as solid household sentiment continued to +852 2252 1306

spur increased consumer spending. Growth in private investment slowed, possibly due to

rising expectations of rate hikes in the US. Goods exports continued to strengthen, likely

buoyed by strong global demand for AI-related electronics, though net exports remained a

drag. In light of the latest Q2 reading, we slightly lower our 2026 GDP growth forecast to

4.5% from 4.8%, with downside risks from quicker-than-expected rate hikes by the Fed.

Personal consumption growth moderated in Q2

Following four quarters of robust growth, private consumption expenditure (PCE)

continued to expand steadily in Q2. PCE growth moderated to 2.9% y-o-y in Q2 from 4.9%

in Q1, partly due to a much higher base. We believe the recovery in Hong Kong's financial

and residential property sectors remains the primary driver of this growth. This slight

moderation in private spending aligns with the continued modest slowdown of growth in

retail sales data for Q2. Data released by the C&SD show that retail sales growth

decelerated to 8.3% y-o-y in April-May from 12.1% in Q1.