The Hong Kong economy expanded at its fastest pace in almost five years in the first quarter.

Advance estimates released by the Census and Statistics Department on Tuesday showed the city's gross domestic product jumped 5.9 percent year on year in real terms in the first three months of the year.

That was also stronger than the 4 percent growth in the fourth quarter of 2025.

First-quarter growth was boosted in part by exports, which rose by 23.8 percent from a year ago and 15.4 percent from the October-December quarter.

Gross domestic fixed capital formation also helped lift the economy during the period, rising by 17.7 percent year on year in real terms, after an 11.7 percent growth in the fourth quarter.

Both private and government consumption expenditure rose as well, with private spending up 5 percent year on year and government consumption 2.9 percent higher.

Commenting on the figures, a government spokesperson noted that the local economy "expanded robustly" in the first quarter of 2026, adding that the outlook remains positive, thanks to strong global demand for AI-related electronics, sustained growth in visitor arrivals and robust cross-boundary financial activities.

"Relatively solid business and consumer sentiment is expected to continue supporting domestic demand. However, persistent tensions in the Middle East pose downside risks to the economic outlook," the spokesperson said.

"The government has taken targeted measures to safeguard energy supply stability and mitigate the impacts on affected sectors," the spokesperson added, noting that the authorities would closely monitor the risks.

Joseph Chan, associate professor of practice in management and strategy at the University of Hong Kong Business School, said the figures showed the economy is undergoing a "comprehensive recovery".

"It's further bolstered by the 'wealth effect' where the rebound in the stock and residential property markets really helped boost the consumer confidence," he told RTHK.

"There's been a sustained recovery in the local consumption, retail and dining [businesses] have benefited from the income growth.

"Also, the government's talents and innovation policies are starting to materialise, and the policies to deeply integrate Hong Kong into the national strategy to bring in investment and [helping mainland firms] 'go global' are actually getting fruitful outcomes."

Gary Ng, senior economist at French investment bank, Natixis, noted that the general economic momentum is stronger than he anticipated, especially over private consumption.

"We all know that there has been an economic transition in the private consumption side that the household confidence is not strong enough, with large outflows through outbound tourism.

"But on a net basis, we've finally seen a faster growth rate [in this component] in the first quarter, which means that at least some of the policies that have been put in place have provided certain buffer to this structural transformation," he told RTHK.

But uncertainties arising from the conflict in the Middle East could slow growth moving forward.

"If oil prices remain persistently high, that would drag down the city's GDP growth. Although Hong Kong is service-oriented, imported inflation still could suppress the consumption and investment," Chan said.

He also cited ongoing tensions between Russia and Ukraine that have also affected the global economy.
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Last updated: 2026-05-05 HKT 21:23



Edited by Edmond Fong