Hong Kong Financial Secretary Says City Nears Operating Surplus Amid Economic Growth

Hong Kong's Financial Secretary Paul Chan has indicated that the city may record an operating surplus in the 2025-26 fiscal year, defying earlier forecasts of a deficit for the fourth consecutive year. This improved outlook is driven by robust economic growth, strong exports, and a surge in stamp duty revenue fueled by the stock market's strong performance, with the Hang Seng Index rising over 25% this year. Despite ongoing challenges such as a sluggish property market and falling land sales, which continue to weigh on government revenue, tighter government spending and fiscal discipline are helping stabilize finances. Large infrastructure projects like the Northern Metropolis development will keep the consolidated account in deficit, but day-to-day government operations could see surpluses starting this year. Officials remain cautiously optimistic, noting that growth may slow in the second half of the year but could be supported by factors such as tourism recovery, international events, and a potential US interest rate cut. This fiscal improvement may boost investor confidence and reinforce Hong Kong's position as a stable regional financial hub.