Source: Hong Kong Information Services
Announcing the 2026-27 Budget this morning, Financial Secretary Paul Chan said Hong Kong’s economy grew 3.5% over the past year, allowing the Government to reinforce support for people and enterprises, backed by stable and high-quality development at a national level.
Introducing the Budget’s theme – “Driving High-quality, Inclusive Growth with Innovation and Finance” – Mr Chan said 2025 marked a third consecutive year of growth, with further expansion of 2.5% to 3.5% forecast for 2026.
Describing the city’s economy in 2025 as buoyant, he said external trade remained strong, with private consumption rebounding, and fixed investment accelerating.
Total exports of goods from Hong Kong grew by 12% in real terms, while exports of services rose by 6.3%. Visitor arrivals surged by 12%, with cross-boundary financial services and traffic recording sustained growth.
In terms of domestic demand, private consumption expenditure rose by 1.7%, reversing a downward trend from the second quarter of 2025. Overall investment expenditure grew 4.3%.
The residential property market saw increases in both prices and transaction volumes. Total transactions reached a four-year high of nearly 63,000 for the year, while property prices rose by 3.3% for the year, ending a three-year decline, and rental prices rose by 4.3%. Non-residential property transactions also rebounded, with declines in rentals and prices narrowing.
In the second half of the year, the labour market stabilised. In the fourth quarter, the median monthly employment earnings of full-time employees increased by 4.2% year on year, and the seasonally adjusted unemployment rate stood at 3.8%.
Meanwhile, inflation remained mild. Netting out the effects of the Government’s one-off measures, the underlying inflation rate was 1.1%last year.
Mr Chan also remarked that the stock market delivered a “stellar” performance. The Hang Seng Index rose by 28% over the year, while daily turnover surged by 90% to an historic high of close to $250 billion.
Bright prospects
Looking ahead, Mr Chan observed that global trade tensions have moderated and stated that the Chinese Mainland will be the key driver of economic momentum, providing firm support for Hong Kong, with a strong foundation being laid for the period of the 15th Five Year Plan.
He predicted that investments in artificial intelligence and other new technologies will continue to underpin trade expansion in Asia, and that market expectations of further interest rate cuts in the US will bolster confidence.
The finance chief said exports of Hong Kong goods and services are expected to sustain decent growth, while a stable labour market and rising household incomes will drive private consumption. He said improving business sentiment will boost asset markets and investments, but cautioned that the international environment remains complex and uncertain.
Forecasting growth of 2.5% to 3.5% in Hong Kong this year, Mr Chan said the Government anticipates further real terms growth of 3% on average per annum from 2027 to 2030. He added that inflation is expected to be moderately higher than last year, with the underlying inflation rate and the headline inflation rate reaching 1.7% and 1.8% respectively.
The financial secretary also outlined that Hong Kong intends to proactively align with the 15th Five Year Plan, better integrate with and serve national development, and continue to participate in developing the Greater Bay Area.
He said the current-term Government is committed to expanding economic capacity and enhancing competitiveness, expediting the development of the Northern Metropolis, driving growth through innovation and technology (I&T) and a focus on talent, and developing new quality productive forces tailored to local circumstances.