Paul Chan: US trade shift impacts Hong Kong 'primarily psychologically'

Hong Kong Financial Secretary Paul Chan Mo-po on Sunday dismissed concerns that shifting US trade policy and interest rate trends could derail the city's economic recovery, describing the impact as "primarily psychological." Speaking two days after the government raised its full-year 2026 growth forecast to 3.5-4.5%, Chan acknowledged that changes in US trade policy and rates would "naturally carry a significant impact" on Hong Kong. However, he noted that little change is expected in rates for the rest of the year, with one additional 0.25% increase already priced in by markets.

Chan said the US midterm elections pose manageable risks, and the real challenge lies in managing market volatility driven by psychological factors rather than fundamental economic weakness. He expressed optimism that Hong Kong's growth momentum will continue into the second half of the year. His remarks aim to reassure businesses and investors that while external headwinds exist, the city's underlying conditions remain stable and capable of sustaining the upgraded growth trajectory.