Hong Kong consumers stay cautious despite stronger cash flow

Fewer consumers expect payment difficulties, but recession and inflation concerns continue to weigh on spending.

Hong Kong consumers showed improved financial resilience in the second quarter of 2026, even as households remained cautious about spending and borrowing, according to TransUnion’s latest Consumer Pulse Study.

The study found that 55% of Hong Kong consumers were optimistic about their household finances over the next 12 months, slightly lower than 58% in Q2 2025. Recession became the top financial concern, cited by 56% of respondents, followed by inflation and job security at 55% each.

Despite softer optimism, fewer consumers expected financial distress. Only 13% said they expected to be unable to fully pay at least one bill or loan, down sharply from 24% a year earlier.

Income growth also moderated. About 36% of consumers said their income increased over the past three months, compared with 44% in Q2 2025. Looking ahead, 42% expected their income to rise over the next 12 months, down from 49% a year earlier.

Consumers continued to prioritise essentials over discretionary purchases. About 35% said they cut back on discretionary spending in the past three months, whilst 36% expected to reduce discretionary spending over the next quarter. Large purchases also remained weak, with 38% expecting to spend less.

Essential spending remained more resilient, with 28% expecting higher spending on bills and loans and 27% expecting higher spending on medical care and services.

Borrowing appetite weakened despite improved confidence in credit access. Around 57% of consumers said they had sufficient access to credit products, up from 55% a year earlier. However, only 27% planned to apply for new credit or refinance in the next year, down from 42%.

Among those planning to seek credit, demand was concentrated in unsecured products. About 51% intended to apply for a new credit card, 27% planned to request a higher limit on an existing card, and 26% planned to apply for a personal loan.

High borrowing costs remained the main barrier to credit applications, cited by 28% of those who abandoned plans to apply. This was followed by long approval timelines at 27% and application complexity at 26%.

The study also found weaker engagement with credit monitoring. About 28% of consumers said they do not monitor their credit, up from 21% in Q2 2025. Only 48% considered credit monitoring important, compared with 55% a year earlier.

At the same time, sentiment toward artificial intelligence improved. About 51% of consumers said AI would have a positive long-term impact on their lives, up from 49% a year earlier.

Fraud exposure remained elevated, with 40% of Hong Kong consumers saying they were targeted by or fell victim to fraud schemes in the past three months. Smishing was the most common fraud type, affecting 37% of targeted consumers, followed by vishing at 34% and phishing at 31%.

TransUnion said cybersecurity action remained inconsistent. About 28% of consumers took no cybersecurity-related action in the past 60 days, mainly because they did not want to invest time or were unsure what action to take.