Economic Outlook for 2026 and the Medium Term
16. Entering 2026, global trade tensions have moderated, and economic activities continued to expand in major economies. The Chinese Mainland will be the leading contributor to global economic growth, serving as the key driver for both regional and global economic momentum. The steadfast development of our country will continue providing firm support for Hong Kong.
17. Our country will implement more proactive macro policies this year, expanding domestic demand, and steadfastly advancing high‑quality development, while maintaining reasonable economic growth. This will lay a strong foundation for the 15th Five‑Year Plan period, and generate propitious conditions for Hong Kong's economic growth.
18. Driven by investments in AI and other new technologies, the demand for related products continues to underpin the trade expansion in Asia. Market expectations of further interest rate cuts in the US would bolster investor confidence. The IMF forecasts moderate growth for the global economy this year.
19. Benefitting from these factors, Hong Kong's exports of goods should sustain decent growth. Exports of services will also continue to increase, driven by increasing visitor arrivals and demand for financial services.
20. Domestic demand will grow steadily. A stable labour market and rising household incomes will drive private consumption, while improvement in business sentiment, coupled with expectations of interest rate cuts, will boost asset markets and investments.
21. Nevertheless, the international environment remains complex and intricate. With the major advanced economies still frequently shifting their trade and economic policies, uncertainties will continue to loom over global trade. A slower‑than‑expected pace of US rate cuts could hamper the optimism currently underpinning the global financial market.
22. Based on our assessment of the current global and local economic situations, we forecast that Hong Kong's economy will grow by 2.5 per cent to 3.5 per cent this year.
23. As for prices, external price pressures are in check. With the local economy continuing to expand, inflation this year is expected to be moderately higher than last year. We forecast the underlying inflation rate and the headline inflation rate this year to be 1.7 per cent and 1.8 per cent respectively.
24. In the medium term, protectionism will persist in some major economies, while fragmentation of the global economy will continue. Nevertheless, the rise of the "Global South" and the reshaping of the global trade and investment landscape will unlock new markets and new growth areas for Hong Kong.
25. This year marks the beginning of the 15th Five-Year Plan. Hong Kong will proactively align with the 15th Five‑Year Plan, better integrate and serve the overall national development, and continue to proactively participate in development of the Guangdong‑Hong Kong‑Macao Greater Bay Area (GBA).
26. The current‑term Government is committed to expanding economic capacity and enhancing competitiveness, expediting the development of the Northern Metropolis (NM), driving growth through talents and innovation and technology (I&T) and developing new quality productive forces tailored to local circumstances for promoting high‑quality economic development.
27. We forecast that Hong Kong's economy will grow on average by three per cent per annum in real terms from 2027 to 2030, with the underlying inflation rate averaging two per cent a year.
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