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(Bloomberg) — Hong Kong’s economic growth slowed more than forecast last quarter, even as a global rush to invest in artificial intelligence turbocharges the city’s exports.
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Gross domestic product expanded 4.3%, compared with 5.9% in the first three months of the year. The median forecast of economists surveyed by Bloomberg was 4.9%.
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On a quarter-on-quarter basis, GDP shrank 0.6%, its first decline in nearly four years, according to advance estimates released Friday by the Census and Statistics Department. Private consumption, government spending and investment grew at a slower rate in real terms compared with the first quarter, it said in a statement.
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Until the surprise slowdown, the Asian financial center has been on an upswing, helped by a surge in AI-related shipments alongside a pickup in consumption and investments. The transshipment hub has become a vital conduit for high-tech goods moving in and out of China, emerging as a key node in the booming AI trade across the continent.
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“Looking ahead, the Hong Kong economy should continue to pose solid growth in the second half of 2026, a government spokesman said. “Vibrant global demand for artificial intelligence-related products should bolster merchandise exports, while exports of services should benefit from sustained growth in visitor arrivals and steady demand for financial and business services.”
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At the same time, Hong Kong is vulnerable to the oil shock triggered by the Middle East conflict, as it imports nearly all of its energy and relies on fossil fuels for power generation.
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Hong Kong’s exports surged by the most in more than four decades to hit a record in June, growing faster than imports for the first time this year. Almost all of its trade is driven by re-exports, with the city producing little AI hardware itself.
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(Updates with data details in third paragraph, adds government comment.)
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