Financial Secretary Paul Chan on Saturday warned that promoting economic development amid a fiscal deficit would be Hong Kong's "main challenge", saying the government is studying how to boost income and cut costs to achieve a balance.

Speaking on RTHK's "Voices from the Hall", where he gathered public feedback ahead of the upcoming budget, Chan said Hong Kong's economy grew steadily in the first three quarters of 2024 but not as strongly as expected due to high interest rates and geopolitical factors.

The finance chief said the government is focusing on cost-cutting to tackle a deficit estimated to be just below HK$100 billion.

“Although we need to move forward with public works projects and develop the Northern Metropolis, we have to prioritise developments according to their urgency," he said.

"At the same time, we need to study how to increase revenue, based on the principle that people who can afford to pay more do pay more, to minimise the impact on Hongkongers."

Chan dismissed suggestions that Hong Kong's property slump would drop in the future.

"Our property market has been experiencing an adjustment period, due to external factors and the high interest rate environment, among other reasons," he said.

"[But] property prices in Hong Kong have stabilised and transaction volume has increased."

He also insisted the government will not restore a land-sale mechanism, which was scrapped more than a decade ago, in response to an attendee's call.

Abolished in 2013, the application-based mechanism had allowed developers to apply for, and then offer a price for sites listed by the government, before authorities put the plot up for sale.

"We hope that the government takes the lead with every quarterly land sale. We can assess the situation to see how many plots of land we're putting up for sale, what type of land is being sold, and how we're going to put those parcels out to market," he said.

After some attendees wanted to discuss the government's HK$2 transport subsidy scheme, the financial chief said labour and welfare officials are studying different views on the matter.

The financial secretary is set to deliver his next budget speech on February 26.