Hong Kong’s budget deficit will be just under HK$100 billion, the finance chief told Reuters
HONG KONG (Reuters) – Hong Kong’s deficit for this fiscal year is expected to be just under 100 billion Hong Kong dollars ($13 billion), the city’s finance chief said on Saturday.
The government is “focusing on austerity measures” to tackle the deficit, Paul Chan told residents on public broadcaster RTHK’s program where he was gathering public feedback ahead of the upcoming budget.
“While we must move forward with public works projects … we must prioritize development according to their urgency,” he said.
The growth rate of the economy in the first three quarters of 2024 was not as strong as expected due to high interest rates and external challenges, Chan said.
Hong Kong’s economy is expected to grow 2.5% in 2024, he wrote in a blog post in December. This followed a growth rate of 1.8% in the third quarter, which was below expectations.
The estimated deficit for the year ending in March is roughly double the previous forecast of HK$48.1 billion in the budget presented in February.
Chan attributed the deficit mainly to a sharp drop in revenue from land sales. Stimulating the economy amid a fiscal deficit would be the “biggest challenge” for Hong Kong, he said.
($1 = 7.7779 Hong Kong dollars)
