Hong Kong Budget Summary 2025-2026 - Commentary

On 26 February 2025, the Financial Secretary delivered the Hong Kong SAR Government's ("the Government") 2025-26 Budget ("the Budget"). The Budget was wide ranging in terms of measures to shore up the Government's finances while maintaining investment in public services and longer-term capital projects. For the 2025-26 fiscal year, the Financial Secretary is forecasting a small operating deficit but a large deficit in the capital account. This is attributed to expectations of subdued land sales revenue, and significant expenditure allocated to ongoing capital projects.

The Financial Secretary also forecast an annual budget deficit of HKD 87.2 billion for the 2024-25 fiscal year, almost double its original estimate of HKD 48.1 billion. This is primarily due to the significant shortfall in land related revenue and stamp duty. Despite recording a third consecutive fiscal deficit, Hong Kong's fiscal reserves remain relatively healthy, at an estimated HKD 647.3