Hong Kong government records HK$101.6 billion deficit for current fiscal year, reserves expected to reach HK$733.2 billion

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Paul Chan

28th February 2024 – (Hong Kong) In the latest release of the Budget today, the Hong Kong government announced that it anticipates a consolidated deficit of HK$101.6 billion for the current fiscal year, with fiscal reserves projected to reach HK$733.2 billion by 31st March. Furthermore, the government foresees a fiscal deficit of HK$48.1 billion for the next fiscal year, resulting in a decrease in fiscal reserves to an estimated HK$685.1 billion.

Authorities explained that the slower-than-expected pace of economic growth in Hong Kong last year was influenced by rising global interest rates, economic slowdown, and continued geopolitical tensions. Despite an overall decrease in expenditures following the COVID-19 pandemic, the softening of the asset market led to a decline in revenue from land premiums and stamp duties, resulting in a larger consolidated deficit than initially anticipated.

Financial Secretary Paul Chan revised the estimate for government revenue in the current fiscal year to HK$554.6 billion, representing a 13.7% decrease or HK$87.8 billion less than the original estimate. The most significant decline was observed in land premium revenue, which amounted to only HK$19.4 billion, significantly lower than the initial estimate by HK$65.6 billion. Revenue from stamp duties, at HK$50 billion, also fell short of the original estimate by HK$35 billion.

The revised estimate for total government expenditure in the current fiscal year decreased by 10.2% compared to the previous year and is 4.3% lower than the original estimate, amounting to HK$33.1 billion less.