Hong Kong’s budget deficit to reach $13B

HONG KONG:
Hong Kong is facing a significant budget shortfall, with a projected deficit of nearly HK$100 billion (roughly $13 billion) for the current fiscal year, according to the city’s finance chief, Paul Chan. In response, the government is implementing cost-saving measures to mitigate the impact, although it remains committed to progressing with essential public works projects.

Chan acknowledged that the city’s economic growth in 2024 had fallen short of expectations, hindered by high interest rates and external economic pressures. Hong Kong’s economy is now expected to grow by just 2.5%, a modest forecast after a disappointing third-quarter growth rate of 1.8%.

This year’s deficit is double the amount initially projected, highlighting the strain on government finances. A major contributor to the shortfall is a sharp decline in land sales revenue, which has traditionally been a key source of income for the city.

Despite these challenges, Chan emphasized that the government’s priority would be to manage the deficit while continuing to support urgent developments and investments that would help stimulate the economy. With the fiscal gap widening, Hong Kong’s leadership now faces its toughest challenge: navigating the economic turbulence while working to restore fiscal balance and ensure sustainable growth for the future.
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