How to import config and content using config import and hook_update_N Background: I have config read-only setup on non-development environments. So all configurations (including enabled modules) are created and exported from development site and imported to different environment. 

Problem: I need few new content entity types to be imported and add content of those types in database update (i.e. hook_update_N()).

As per https://www.drupal.org/node/2762235, all database updates should run before configuration import. Since my entity definitions are in configuration,  hook_update_N throws fatal that entity types do not exist. I can run config-import after hook_update_N, but it can cause other problems (as mentioned in above d.o issue). 

How to import configuration and content in this case?
Don't add content using hook_update_N() there's not really anyway to make that work if the entity types are in config. What you can do is just use something like default content and add you own step to config import to look to see if any installed modules provide default content and create that.