Hong Kong’s economy remained resilient in the second quarter of this year, Financial Secretary Paul Chan Mo-po told a meeting of the Legislative Council’s financial affairs panel on Monday.

The latest statistics show that the local economy grew at the strongest pace in five years during the period, indicating that economic activities have increased significantly. Due to the influence of global oil prices, the forecast for this year’s underlying inflation has been revised upwards to 2.5 percent.

“The year-on-year growth rate of overall merchandise exports accelerated further in April, reaching 42.9 percent, driven by exports of artificial intelligence-related electronic products,” Chan said.

“The proportion of AI-related goods in total merchandise export values had risen from nearly 60 percent in 2022 to 70 percent in the first quarter of this year. The value of AI-related electrical products surged 41.5 percent in the first quarter and picked up another 54.3 percent in April,” he said.

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The number of visitor arrivals in the special administrative region went up 10 percent in April, year-on-year, and climbed eight percent year-on-year during the Labor Day “golden week” holidays.

The finance chief warned that if the Middle East conflict escalates again, it is expected to bring downside risks to Hong Kong’s economy.

“But, driven by global demand for AI-related electronic products, the continued boom in inbound tourism, thriving cross-border financial activities, the expected robust services export demand, and the continued expansion of local domestic demand, Hong Kong’s economic outlook remains largely resilient,” he said.

The latest seasonally-adjusted unemployment rate stands up 3.7 percent. But, Chan said he does not expect the figure to worsen significantly this year.

“The administration is continuously monitoring the overseas worker import policy implemented in the nursing and catering industry. Relevant authorities are also reviewing various labor retraining programs that can help grassroots citizens adapt to a wider range of jobs,” he added.