Impact of US trade policy shifts on Hong Kong ‘primarily psychological’: Paul Chan

Changes in US trade policy and interest rate trends will significantly affect Hong Kong’s economy but the impact will be “primarily psychological”, the finance chief has said, while expressing optimism for growth momentum to continue into the second half of the year.Two days after the Hong Kong government raised its full-year economic growth forecast for 2026 to a range of 3.5 to 4.5 per cent, Financial Secretary Paul Chan Mo-po, who appeared on a radio show on Sunday, addressed questions about the biggest risks facing the city in the second half of the year.Chan warned of external risks caused by “psychological factors”, saying changes in US trade policy and interest rate trends would “naturally carry a significant impact” on Hong Kong.He said interest rates would see little change for the remainder of the year, with one additional 0.25 per cent rate increase already priced in by the market.“Meanwhile, the US is facing midterm elections, but the risks for the remainder of the year will be manageable,” he said.“We believe the impact here is primarily psychological. Psychological factors will affect the financial markets, leading to greater market volatility, so we simply need to manage our risks effectively.”