HK could reverse fiscal deficits from this year: FS - RTHK
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HK could reverse fiscal deficits from this year: FS

2025-08-03 HKT 11:41
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  • Paul Chan expects the asset market and the business environment to improve, with more tourists, mega events, and the US possibly cutting interest rates next month. File photo: RTHK
    Paul Chan expects the asset market and the business environment to improve, with more tourists, mega events, and the US possibly cutting interest rates next month. File photo: RTHK
Financial Secretary Paul Chan on Sunday said that Hong Kong could reverse its expected fiscal deficit for this financial year, as the performance of the market in the first half of the year had been positive.

The SAR recorded three percent economic growth in the first quarter, Chan said, and noted there had been 3.1 percent year-on-year growth in the second quarter.

He also said the city also marked a 0.3 percent year-on-year increase in value of retail sales in May and June, while the property market also performed well with monthly average transactions hitting 5,600 in the second quarter, a 37 percent increase from the same period last year.

Speaking on a radio programme, the minister said the government's operating account might be able to record a surplus by the end of the fiscal year.

"We originally expected deficits of a few billion in our operating account for the 2025/26 fiscal year, but if this momentum continues, there is a chance our operating account may have a surplus. We will continue to optimise our financial resources and develop our economy, so I expect a surplus will be recorded each year from 25/26," he said.

"On the other hand, we have to speed up the development of the Northern Metropolis and build infrastructure, so we will have to spend money there."

"The consolidated account may still record deficits, as land sales income has not resumed yet. But as a whole, the government's finances are very stable and healthy," Chan said.

The minister said the economy would continue to grow in the third quarter, but may not perform as well as the first half of the year, given export activity had been vibrant in the first two quarters which had fuelled growth.

But he expected the asset market and the business environment to improve, with increased tourists numbers, mega events, and the US possibly cutting rates in September.

Meanwhile, writing on his blog, Chan said the government's report on the city's business environment -- which was released on Wednesday -- was well received by business leaders and analysts.

"This is particularly meaningful in the current complex geopolitical situation, and the report serves as a more objective and comprehensive reference for foreign enterprises and investment organisations," he wrote.

HK could reverse fiscal deficits from this year: FS