Overview

• Hong Kong's 2024-25 fiscal deficit is now projected at HK$100 billion, more than double the HK$48 billion forecast earlier this year.
• The city's reliance on land sales, stamp duties, and corporate taxes has been heavily impacted by a sluggish property market and weakened corporate performance.
• Financial Secretary Paul Chan has highlighted the need to cut government expenses and reallocate resources to address the structural revenue challenges.
• The government is also considering measures such as external financing and potential tax increases to manage the growing deficit, though borrowing would require careful project selection.
• Hong Kong's GDP growth forecast for the year has been downgraded to 2.5%, reflecting weaker global demand and subdued local consumption.