31/07/2026 10:11 pm MYT
Based on advanced estimates, Hong Kong's real GDP increased by 4.3% year-on-year in 2Q 2026, down from the robust growth of 5.9% in the previous quarter (figure 1). On a seasonally adjusted basis, real GDP decreased by 0.6% quarter-on-quarter in 2Q 2026, marking the first quarterly contraction since 3Q 2022.
Most expenditure components recorded slower growth. Private consumption and government consumption increased by 2.9% and 0.5% respectively in 2Q 2026. Meanwhile, gross domestic fixed capital formation increased by 4.6% year-on-year (table 1).
Exports and imports of goods increased by 28.8% and 29.3% respectively from a year ago. Meanwhile, exports and imports of services increased by 3.4% and 2.8% respectively. Due to strong global demand for AI-related products, Hong Kong's economy will continue to be supported by robust merchandise exports.


Note from Publisher
This week, prime minister Anwar announced that the Malaysian government will subsidize artificial intelligence (AI) software subscriptions for students. Up to 100,000 Malaysian youths will receive free subscriptions to leading AI software for three months. The aim is to provide practical, hands-on experience, enabling students to develop critical skills in areas such as coding and AI engineering. This is part of the government’s efforts to make Malaysia a regional AI hub by 2030.
However, subsidizing AI tools is only a tiny step. A nation's ability to adopt, develop, and scale AI will increasingly determine its economic competitiveness and attractiveness to investors. Malaysia, like many developing countries, is lagging in the adoption of AI.
To build strong AI capabilities, Malaysia must invest in high-quality STEM education, world-class research universities, accessible investment capital, robust digital infrastructure, and a stable legal and regulatory framework. Equally important is fostering close collaboration among government, academia, and industry to accelerate AI innovation and adoption. Achieving these goals requires sustained commitment, strategic investment, a clear long-term vision, and a well-defined national roadmap. Building a competitive AI ecosystem is a marathon, not a sprint, and success will depend on consistent execution over many years.
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