Financial Secretary Paul Chan on Wednesday delivered his 2025-26 budget to the Legislative Council.

Chan started the speech for his financial blueprint – which aims to tackle an estimated HK$100 billion deficit – by saying that Hong Kong needs to reform, innovate and relentlessly improve.

He pointed out that though counter-cyclical measures launched in the past few years to counter the pandemic have stabilised the economy and eased people’s burden, it has resulted in a fiscal deficit.

“In this budget, I propose a reinforced version of the fiscal consolidation programme, including a cumulative reduction of government recurrent expenditure by seven percent from now through 2027-28," he told lawmakers at Legco.

“Strictly containing public expenditure is a must, but we should proceed in a steady and prudent manner, and be careful to find a balance among the various impacts that may arise in the process.”

The finance minister also said the “approach represents our all-out effort to minimise the impact on public services and people's livelihood”, adding that "it gives us a clear pathway towards the goal of restoring fiscal balance”.

On the SAR's economic growth, Chan said authorities forecast that Hong Kong's gross domestic product will continue to grow moderately this year, rising two to three percent in real terms.

The economy grew by 2.5 percent in 2024.

He also forecast that the economy will grow, on average, by 2.9 percent a year in real terms from 2026 to 2029, with underlying inflation expected to be at an average of 2.5 percent a year.
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Last updated: 2025-02-26 HKT 11:19