Hong Kong may see surplus in current financial year, defying previous forecasts of continuing deficit
Hong Kong has seen improved performance in retail sales and the property market, recording 3.1 per cent year-on-year growth in the second quarter, Financial Secretary Paul Chan said on a Commercial Radio programme on Sunday.
'We originally expected deficits of a few billion in our operating account for the 2025-26 fiscal year, but if this momentum continues, there is a chance our operating account may record a surplus,' Chan said in Cantonese.
Hong Kong saw a deficit of HK$87.2 billion for the 2024-25 fiscal year, the third consecutive shortfall.
During his budget address in February, Chan attributed the deficit to the poor property market taking a toll on government revenue from land sales and stamp duty.
Due to the deficit, the government said that it aimed to cut spending by 7 per cent over the next three years.
At the time, the finance minister said the city forecast a continuing deficit of HK$67 billion in the coming 2025-26 financial year. As part of spending cuts, the government axed a HK$2,500 annual subsidy for students and reduced the public transport subsidy scheme, which offers a monthly rebate for commuters.
Chan said on Sunday that while the government had upcoming infrastructure expenses, including those for the Northern Metropolis development plan near the border with mainland China, the city's finances were 'very stable and healthy.'
Last week, the government said in a statement that Hong Kong's financial markets' performance had steadily improved this year.
The Hang Seng Index recorded an increase of over 25 per cent so far this year, according to the statement. The government has also 'achieved remarkable results' in attracting talent and investment, it said.
Meanwhile, Chan said on Wednesday that more mainland Chinese companies were expected to list on Hong Kong's stock exchange amid geopolitical tensions, which have made it harder for them to list in the US.
Mainland Chinese companies 'would naturally want to come to Hong Kong for listing, because… they can access both international and Mainland capital,' the finance chief said.
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