Hong Kong ‘optimistic’ on economic growth despite global slowdown, Paul Chan says

Financial Secretary Paul Chan Mo-po said Hong Kong was more optimistic about its economic prospects than the IMF was about the world economy. The IMF expects global growth to slow from 3.5 per cent last year to 3.1 per cent this year. Asia, however, is expected to keep expanding faster than the global economy.

The IMF recently raised its 2026 real GDP growth forecast for Hong Kong to 3.8 per cent. Hong Kong’s government kept its own full-year forecast at 3.5 to 4.5 per cent. Chan linked this confidence to Hong Kong’s ability to attract international capital and connect mainland Chinese companies with overseas markets and professional services.

The outlook is not risk-free. Chan highlighted geopolitical friction, energy shortages, inflation, trade disputes, extreme weather and tighter financial conditions. Hong Kong plans to respond by directing patient capital into strategic sectors, expanding offshore renminbi tools and using financial instruments to manage risks.

The International Monetary Fund, or IMF, is an international organisation that works with member countries on monetary cooperation, financial stability and economic policy. It publishes assessments and forecasts so governments, businesses and investors can understand likely economic conditions. The article uses the IMF’s projections to compare Hong Kong’s prospects with the wider world.

An economic growth forecast estimates the expected change in a country or city’s production of goods and services. Real GDP growth removes the effect of changing prices, making the measure more useful for tracking actual economic activity. For example, the IMF forecast Hong Kong’s 2026 real GDP growth at 3.8 per cent.

Forecasts are informed estimates, not guarantees. They can change when conditions shift. In the article, the IMF expects global growth to slow from 3.5 per cent last year to 3.1 per cent this year. AI disruption, energy prices, conflicts and financial pressures could all affect future results.

The forecasts cited place Hong Kong’s expected growth above the global economy’s expected growth. The IMF forecast Hong Kong’s 2026 real GDP growth at 3.8 per cent, while it expects global growth to reach 3.1 per cent this year. The direct gap is therefore 0.7 percentage points.

This is a comparison of growth rates, not a claim that Hong Kong will add 0.7 per cent to global output. Dividing 0.7 by 3.1 shows that Hong Kong’s forecast rate is roughly 23 per cent higher than the global rate. The comparison also depends on the periods being discussed, since the Hong Kong figure refers to 2026.

Hong Kong’s government gave an even wider range of 3.5 to 4.5 per cent for its full-year forecast. Against 3.1 per cent global growth, that range is 0.4 to 1.4 percentage points higher. Chan attributed the stronger outlook to capital flows, mainland links and AI-related opportunities.

Hong Kong believes it can benefit because it sits where several major demands meet. Developing economies need capital and technology. Mainland Chinese enterprises need international markets and professional services. Chan said Hong Kong can help satisfy both needs through its financial system, business connections and expertise.

The key mechanism is connection. Hong Kong can channel global capital toward opportunities while linking mainland companies with overseas customers, investors and services. Chan also wants the city to become an offshore operating base and professional talent hub that helps mainland enterprises expand globally. Its capital markets could fund AI infrastructure in developing economies.

This strategy could raise Hong Kong’s own role while supporting growth elsewhere. It depends on the city continuing to attract capital, provide trusted financial tools and develop relevant skills. Chan also called for citywide AI literacy programmes so residents of every age can adapt as technology changes work and demand.

The AI boom is already reshaping international trade. Paul Chan said discussions at the Bangkok summits indicated that nearly 30 per cent of global import growth over the past two years came from AI-related goods. This makes AI a major source of demand rather than only a future technology story.

Economies integrated into the AI supply chain can benefit from that demand. They may produce, supply or support the goods and infrastructure needed for AI development. As orders and investment rise, their exports, business activity and expected growth can improve. The article contrasts these economies with war-torn countries, whose forecasts were sharply downgraded.

The gains are uneven and may increase economic differences. Chan warned that technology can strengthen existing advantages or worsen existing risks. AI-linked growth therefore creates opportunities for Hong Kong and other connected economies, but it also raises questions about jobs, access to capital and the ability of developing countries to participate.

The central danger is a mismatch between rising productivity and available work. The article says developing countries could face a shortfall of 800 million jobs as 1.2 billion young people enter the workforce over the next 10 to 15 years. AI may help economies produce more, but that does not ensure enough paid work for new workers.

The mechanism is uneven technological change. AI can amplify competitive advantages, helping some firms and economies grow quickly. But it can also reduce demand for certain tasks or reward workers with advanced skills. If job creation lags behind the number of young entrants, more people may struggle to find stable livelihoods even as output improves.

The article presents this as a major policy challenge, not a guaranteed outcome. Chan called for capital markets to help finance foundational AI infrastructure in developing economies. He also supported citywide AI literacy programmes, showing that skills and access will matter alongside investment.

Capital markets are systems where long-term financial assets, such as shares and bonds, are issued and traded. They let governments and companies raise money from investors instead of relying only on current income or bank loans. This matters because major infrastructure projects, including AI systems and energy networks, often need large sums over many years.

The mechanism is long-term funding. Investors provide capital through bonds or equity, while issuers use it for infrastructure and strategic sectors. Hong Kong’s financial secretary said the city should use its capital markets to fund foundational AI infrastructure in developing economies. Financial tools can also help manage exposure to changing rates, currencies and other risks.

Capital markets cannot remove debt or geopolitical danger. Borrowing still creates repayment obligations, and higher bond yields can squeeze government budgets. Chan said Hong Kong would combine patient capital, broader offshore renminbi instruments and risk-management tools to strengthen resilience while supporting investment.