Hong Kong growth on track to hit target despite Middle East war: finance chief

Hong Kong's Financial Secretary, Paul Chan Mo-po, has publicly reaffirmed the city's economic growth forecast of 2.5% to 3.5% for 2026, asserting that the recent escalation of conflict in the Middle East will not derail these targets. Speaking at a budget forum organized by the Hong Kong News-Expo, Chan acknowledged that the US-Israeli war on Iran, which began last week, was fully considered during budget preparations. He stated the conflict is expected to create a bifurcated impact, hurting the traditional trading sector while potentially benefiting financial markets. Chan emphasized the government's vigilance regarding broader geopolitical tensions, particularly Sino-US relations, in the lead-up to a critical visit by US President Donald Trump to China for talks with President Xi Jinping from March 31 to April 2.

Chan's comments mark his first detailed economic assessment since the outbreak of hostilities in the Middle East, following the budget he delivered on February 25. He expressed relative confidence in the city's economic resilience, noting the administration would "work hard and hope to achieve the upper bound" of the growth range. The strategy involves a dual approach of consolidating Hong Kong's traditional markets in the US and Europe while actively developing new economic partnerships within Asia. This outlook underscores Hong Kong's attempt to navigate a complex global landscape where regional conflicts and great-power competition create both headwinds and unexpected opportunities for its finance-centric economy.