Q2 growth slows to 5.1% as inflation forecast raised to 5.4%

The government has released second-quarter figures: GDP grew 5.1% year on year, while underlying inflation reached 5.4%. The full-year inflation forecast was raised from 4.5% to 5.4%; the 5–6% GDP forecast stands.

Why the slowdown?

The murky global outlook and Europe-America debt troubles weighed on Hong Kong’s exports and private consumption. Q1 growth was revised to 7.5%, making Q2’s deceleration stark.

What’s driving inflation?

Rising food prices are the main driver. The government says imported inflationary pressure persists and inflation will stay elevated in the second half.

What does it mean for workers?

Inflation erodes purchasing power and squeezes real wage growth. In an inflationary environment, long-term investments like MPF matter more — cash savings alone can’t defend against the loss of purchasing power.

How is the government responding?

It will monitor global economic shifts closely and act to stabilise the economy as needed. The Financial Secretary has rolled out relief measures including the HK$6,000 handout to help citizens cope.

Learn how MPF counters inflation at the MPF education hub.