GDP growth records best result since Q4 2023 in Q2

GDP reading: GDP growth ticked up to 3.1% year on year in the second quarter from 3.0% in the first quarter and marked the best reading since Q4 2023. The Q2 reading was above market expectations. A weaker Hong Kong dollar spurring domestic spending, robust tourist inflows boosting services imports, a strong domestic stock market and export front-loading to the U.S. likely all aided economic activity in Q2.

Broad-based upturn: The upturn reflected improvements in private consumption, public spending, fixed investment and exports. Household spending rebounded 1.9% year-on-year in the second quarter, which marked the best reading since Q4 2023 (Q1: -1.2% yoy). Government spending hit an over two-year high of 2.5% in the second quarter, up from the first quarter's 0.9%. Meanwhile, fixed investment growth accelerated to 2.9% in Q2, following the 1.1% expansion recorded in the prior quarter. On the external front, exports of services growth improved to 7.5% in Q2 (Q1: +6.3% yoy). In addition, imports of services growth picked up to 7.0% in Q2 (Q1: +4.7% yoy). Exports and imports of goods also grew at faster paces.

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