The government has raised its full-year real GDP growth forecast for 2026 to 4.8%, from the 3.5% to 4.5% range set in August. The revision follows year-on-year growth of 5.2% in the third quarter and 5.1% across the first three quarters, the fastest growth for that period in five years.
The government expects growth to continue steadily in the fourth quarter, supported by external trade and resilient domestic demand. Real goods exports grew 30.3% year on year, up from 28.9% in the previous quarter, and rose 1.5% from the second quarter on a seasonally adjusted basis. The government economic adviser linked the strong trade performance to global demand for AI-related electronic products. Services exports grew 4.3% year on year, with all major service groups expanding.
Domestic demand also showed growth: real private consumption rose 2.9% year on year for a sixth consecutive quarter, while total investment increased 7.5%, mainly on stronger private-sector investment. The government economic adviser said local residents’ third-quarter spending exceeded its level in the same period of 2018, reaching more than HK$510 billion. Spending by non-local residents in Hong Kong was HK$51 billion, below the HK$86 billion recorded in the same period of 2018, although it grew faster than overall consumption during the quarter.
The government lowered its forecasts for core inflation from 2.5% to 1.9% and overall consumer-price inflation from 2.6% to 2%. It said inflation had been lower than expected partly because higher international oil prices were passing through to fuel-related prices more slowly than anticipated, while fuel subsidies had provided some relief.
The seasonally adjusted unemployment rate edged up to 3.9% in the third quarter. The government economic adviser attributed the increase mainly to graduates entering the labour market. Youth unemployment was 14.6%, notably higher than among other age groups.