Hong Kong Faces Toughest Fiscal Challenges in Decades with New Budget on the Horizon

Finance Secretary Paul Chan outlines a strategy of fiscal consolidation to address mounting deficits while balancing public services and competitiveness.

• Hong Kong has experienced significant deficits in three of the past four years, with the 2024-25 shortfall projected at nearly HK$100 billion (US$12.9 billion).
• Finance Secretary Paul Chan plans to implement strict spending controls and moderate revenue increases under a 'fiscal consolidation' strategy.
• Declining land sales, a key revenue source, have exacerbated the fiscal strain, with revenue dropping from US$21.2 billion in 2018 to just US$2.5 billion last year.
• Experts attribute the fiscal challenges to internal and external pressures, including the pandemic, geopolitical tensions, and an exodus of businesses and talent.
• The upcoming budget aims to balance fiscal responsibility with investments in development and competitiveness, while maintaining essential public services.

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South China Morning Post CNA