Hong Kong Doubles Fiscal Deficit Forecast to HK$100 Billion

Hong Kong's Financial Secretary Paul Chan has announced a projected consolidated deficit of approximately HK$100 billion ($12.85 billion) for the fiscal year ending in March 2025, more than double the earlier estimate of HK$48.1 billion. This significant increase is attributed to poor performance in the asset market, which has adversely affected government revenues from land sales, stamp duties, and corporate taxes. Chan indicated that the government is facing ongoing financial challenges and expects this deficit to persist for about three years, although it may gradually decrease. He reassured lawmakers that the government's fiscal reserves remain sufficient to buffer against economic fluctuations and emphasized a cautious approach to fiscal consolidation. The updated deficit projection aligns closely with the previous year's actual deficit of HK$101.6 billion, reflecting ongoing vulnerabilities in Hong Kong's economy.