Hong Kong’s economy remained resilient in the second quarter, supported by a sharp increase in exports and stronger financial market activity, although escalating tensions in the Middle East continue to pose risks to future growth.
Speaking at a Legislative Council Financial Committee meeting, Financial Secretary Paul Chan Mo-po said the city’s goods exports jumped 42.9 percent year-on-year in April, driven largely by robust global demand for artificial intelligence-related electronic products.
The tourism sector also maintained positive momentum. Visitor arrivals in April increased 10 percent compared to the same period last year, while arrivals during the Labour Day Golden Week holiday rose 8 percent year-on-year.
Labour market conditions showed modest improvement, with the seasonally adjusted unemployment rate easing to 3.7 percent from 3.8 percent a year earlier. At the same time, underlying consumer inflation accelerated to 1.6 percent, largely due to a 3.3 percent rise in energy costs.
Hong Kong’s financial markets recorded a strong recovery during the first four months of the year. Average daily stock market turnover reached HK$270 billion, exceeding the full-year average of HK$250 billion recorded in 2025. Initial public offering (IPO) fundraising also surged, climbing sixfold year-on-year to HK$151.4 billion.
The property market showed signs of improvement as both housing prices and transaction volumes increased during the period.
While the direct economic impact of the Middle East conflict on Hong Kong has so far been limited, Chan warned that ongoing geopolitical tensions have already contributed to higher global oil prices and inflationary pressures. He noted that any further escalation could create meaningful downside risks for the city’s economic outlook.
Despite these concerns, Chan expressed confidence that strong international demand for technology components will continue to support export growth. He added that rising tourist arrivals, active cross-border financial transactions, and sustained demand for business services are expected to strengthen service exports.
Addressing labour shortages, Chan said the government’s labour importation scheme remains focused on industries facing critical workforce gaps, including healthcare and food services, with authorities closely monitoring market conditions.
He also projected that unemployment is unlikely to rise significantly this year, supported by stable retail spending and tourism activity. The government is currently reviewing retraining initiatives aimed at helping lower-income workers transition into a broader range of employment opportunities.
Responding to concerns over liquidity pressures in the construction sector, Chan said the government will work alongside the Hong Kong Monetary Authority to encourage banks to offer more flexible financing and lending arrangements for contractors.
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