Lawmakers on Wednesday passed the budget bill, with all councillors present except one voting in support of it.

Social welfare councillor Tik Chi-yuen abstained.

Financial Secretary Paul Chan welcomed the bill's passage, saying he expects the local economy to pick up further on the back of a rising number of visitors and stronger private consumption.

These have provided support for the economy despite weak export figures, the minister said.

Chan said the Hong Kong economy is expected to grow between 3.5 and 5.5 percent this year, and it could fare better if the global economy and geopolitical tensions don't worsen.

But the FS also cautioned against a number of challenges both externally and internally, saying officials will undertake proper risk management.

"For external challenges, there is the geopolitics, the high interest rate, financial tightening across different places -- these problems will stay for a long time," he told lawmakers.

"Internally, in the short and medium term, we have manpower and talent challenges, the supply is tight. Land supply is also tight in the short term, this is a constraint on our development."

The minister said that besides the country's plans for Hong Kong's development, the SAR needs to open new tracks, such as developing web 3.0.

Chan added that while there are concerns that revenue from salaries tax has fallen due to people leaving the territory, this hasn't been a problem because the jobs these people left behind have been filled by others.

Meanwhile, Development Secretary Bernadette Linn brushed aside the notion that Hong Kong doesn't need to press ahead with two mega projects, because of its dwindling population.

Green groups have cast doubt on whether the SAR needs to reclaim artificial islands off Lantau and build the Northern Metropolis at the same time, as the city's population has shrunk for three straight years.

But Linn told lawmakers during the debate that the Census and Statistics Department has made different population projections, and officials need to plan as though the number of residents will rise.

"With social and economic development, the population in Hong Kong may grow to a level closer to the higher scenario. The number of households, which affects housing demand, is also expected to rise as families becomes smaller," Linn said.

The minister also said more new land is needed to provide facilities for an ageing population, as well as resettlement space for urban renewal because of ageing buildings.