Gov't projects $48.1b deficit for FY24-25

For FY23-24, the government expects a deficit of $101.6b. 

The government anticipates a $48.1b deficit for the fiscal year 2024-25.

Financial Secretary Paul Chan said the projection, coupled with a decline in fiscal reserves to $685.1b due to a $120b bond issuance, reflects ongoing challenges in Hong Kong's external environment and the gradual recovery of asset markets.

For FY23-24, the government expects the deficit to clock in at $101.6 and fiscal reserves to reach $733.2b by 31 March.

In his Budget speech, Chan noted the continued prioritisation of resources for essential policy areas such as health, social welfare, and education, constituting 59.3% of recurrent expenditure. 

Meanwhile, Chan expects non-recurrent expenditure to decrease significantly following the pandemic.

On revenue, Chan expects growth in earnings and profits tax, land premiums, and stamp duty revenue compared to the revised estimate for 2023-24. 

Amidst fiscal challenges, he expressed confidence in overcoming obstacles while maintaining sustainability as a core principle.

Chan also outlined plans for a consolidation program while stressing the importance of maintaining prudent levels of fiscal reserves.

In 2023-24, the revised estimate for government revenue was $554.6b, a 13.7% decrease from the original estimate. Chan attributed the decline to reduced revenue from land premiums and stamp duty amidst subdued asset market conditions.

Moreover, expenditure for 2023-24 is projected at $727.9b, a 4.3% decrease from the original estimate, reflecting post-pandemic adjustments.