Financial Secretary Paul Chan said on Sunday the budget deficit this year is expected to exceed HK$100 billion, far higher than the HK$56.3 billion originally estimated.

Writing on his weekly blog, the minister said government income is going to fall short while expenditure has risen. Given that, he's expecting the deficit to be the second-worst on record.

"In fact, small to medium enterprises and workers are all facing different degrees of economic pressure. The same goes for the government's financial income," he wrote.

Chan added that the numbers would be even worse but for the HK$35 billion raised through the issuing of Green Bonds.

He said stamp duty and land sale revenue are weak, while income and salaries tax are both expected to come in lower than originally forecast because the poor economy has affected consumption, investment and imports.

The minister said the economic situation is expected to remain very challenging for the next few quarters, with the key still hinging on whether the Covid epidemic is brought further under control.

On a positive note, Chan said the employment situation has continued to improve. The latest jobs numbers will be released later this week.