Q1 GDP growth beats expectations at 5.9%: analyst

Nomura raised its 2026 growth forecast to 4.8%.

The economy grew 5.9% YoY in the first quarter of 2026, accelerating from 4.0% in the previous quarter and marking its strongest quarterly growth in nearly five years.

On a seasonally adjusted quarter-on-quarter basis, real GDP rose 2.9%, according to advance estimates from the Census and Statistics Department.

Nomura said the Q1 reading significantly exceeded consensus and its own forecast of 3.5%, making it the strongest GDP print since the second quarter of 2021.

Private consumption was a key driver, rising 5.0% YoY from 2.5% in the previous quarter. Nomura estimated that private consumption contributed 3.3 percentage points to headline GDP growth, supported by stronger household sentiment and recovery in Hong Kong’s financial and residential property sectors.

Investment also strengthened. Gross domestic fixed capital formation rose 17.7% YoY, from 11.7% in 4Q 2025. Nomura said the acceleration may partly reflect lower interest rates, stabilising US-China relations, and investment flows into Hong Kong amid geopolitical tensions elsewhere.

Goods exports grew 23.8%, but imports rose faster at 29.9%. Nomura said net exports remained a drag on growth, estimating a negative contribution of 8.6 percentage points to Q1 GDP.

Services exports rose 3.5%, slower than the 4.7% growth in the previous quarter, whilst services imports increased 3.9%.

Following the stronger-than-expected outturn, Nomura raised its 2026 GDP growth forecast for Hong Kong to 4.8%, from 3.3%.

The government said Hong Kong’s economic outlook remains positive, supported by strong global demand for AI-related electronics, sustained growth in visitor arrivals, and robust cross-boundary financial activities. However, it warned that persistent Middle East tensions pose downside risks.