Hong Kong Raises GDP Forecast as AI Boosts Exports

The Government of Hong Kong raised its 2026 gross domestic product growth forecast to between 3.5% and 4.5%, up from a previous projection of 2.5% to 3.5%. This adjustment follows a significant narrowing of the trade deficit in July, which dropped to HK$4.9 billion ($624 million) from a peak of HK$89.1 billion in March.

Export growth drove the improvement, with shipments increasing nearly 51% year-on-year, including record-high volumes sent to mainland China. Officials attribute this surge to a global investment supercycle in artificial intelligence that has increased demand for electronic products across Asia, while import growth remained lower than economists had forecast.

Despite the positive trend, government officials warned that several downside risks persist. These include trade protectionism, geopolitical tensions in the Middle East, and potential volatility tied to the rapid expansion of AI investment.