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Hong Kong's Trade Deficit Widens in May; AI Products Power Sustained Exports Growth

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Hong Kong's Trade Deficit Widens in May; AI Products Power Sustained Exports Growth

Hong Kong's trade deficit grew in May, as exports and imports slightly weakened but remained robust amid higher demand for artificial intelligence technology.

The trade deficit widened to 6.7% to HK$44.2 billion from the deficit of 4.5% in April, according to a Thursday press release from the Census and Statistics Department. Exports jumped 40.8% year on year to HK$611.2 billion, slower than the previous month's growth of 42.9%. Meanwhile, imports climbed 42% to HK$655.4 billion, weaker than the 44.4% rise in April.

Region-wise, Hong Kong's total May exports to Asia increased by 44.6%, with triple-digit growth in Singapore and notable increases to Taiwan and Vietnam as well. Outside the continent, growth rates were logged in the UK and the US.

The sustained "robust expansion" in merchandise exports was attributed to solid demand globally for electronic products related to AI. Year over year, the city saw a 56.1% surge in the export of electrical machinery, apparatus and appliances, and electrical parts thereof.

"Looking ahead, the still-vibrant global demand for AI-related electronic products should continue to support Hong Kong's merchandise trade performance. The recent easing of geopolitical tensions in the Middle East has provided short-term relief to the global economic outlook; however, headwinds remain. The Government will stay vigilant to external risks," a government spokesman said.

In the three months ended May, seasonally adjusted exports grew 17.1% from the preceding quarter, while imports jumped 16.3%.

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