Goldman Sachs: Hong Kong's GDP grew by 5.9% in the first quarter, far exceeding expectations. The full-year forecast has been revised upwards to 4.6%.

Goldman Sachs released a research report stating that Hong Kong's real GDP in the first quarter of 2026 grew by 5.9% year-on-year, with a seasonally adjusted (non-annualized) growth of 2.9% per quarter, significantly higher than market expectations. GDP growth was mainly driven by inventory accumulation and strong growth in private consumption. However, the bank believes that the boost from inventory replenishment is temporary and may see a reversal in the future. Based on the first quarter data far exceeding expectations, the bank raised its forecast for Hong Kong's full-year real GDP growth in 2026 to 4.6%, up from the previous forecast of 2.4%. According to preliminary data, private consumption in Hong Kong grew by 5% year-on-year in the first quarter of 2026, contributing 3.3 percentage points to the overall GDP growth. Government consumption grew by 2.9% year-on-year in the first quarter of 2026, contributing 0.4 percentage points to the overall GDP growth. Investment growth contributed 11.2 percentage points to the overall GDP growth. Total fixed capital formation in the first quarter of 2026 grew by 17.7% year-on-year. Externally, in the first quarter of 2026, Hong Kong's import growth outpaced export growth, leading to an expansion of the goods trade deficit. Specifically, goods exports grew from a year-on-year 15.4% in the fourth quarter of 2025 to 23.8% in the first quarter of 2026, while goods imports grew from a year-on-year 18.2% in the fourth quarter of 2025 to 29.9% in the first quarter of 2026. The widening goods trade deficit dragged down the overall GDP growth by 9 percentage points. Service exports slowed from a year-on-year 4.7% in the fourth quarter of 2025 to 3.5% in the first quarter of 2026, while service imports increased from a year-on-year 3.7% in the fourth quarter of 2025 to 3.9% in the first quarter of 2026. Service trade contributed 0.1 percentage points to the overall GDP growth.