Hong Kong's economy expanded 4.3% in the second quarter of 2026, slowing from 5.9% in the first quarter and missing economists' forecast of 4.9%, even as exports of artificial intelligence-related goods remained robust. June exports surged to a 42-year high and hit a record peak. Meanwhile, private consumption, government spending, and investment all grew at a slower pace, causing the economy to contract 0.6% quarter-on-quarter, the first contraction in nearly four years. The Hong Kong government still expects strong growth in the second half of the year, supported by global demand for AI goods, a recovering tourism sector, and sustained growth in demand for financial services.