Hong Kong Financial Secretary Paul Chan Mo-po said the special administrative region has achieved a balanced budget sooner than expected, thanks to the booming economy and capital market, as well as the administration’s reinforced fiscal consolidation program.

The revised estimate of government revenue for the financial year of 2025-26 is about HK$688.8 billion (higher than expected) while the revised estimate of total government expenditure is HK$789.2 billion (lower than expected).

As a result, the operating account for 2025-26, which was originally estimated to record a deficit of HK$3 billion, will register a surplus of HK$51.3 billion. The consolidated account will register a surplus of HK$2.9 billion instead of a deficit of HK$67 billion as previously estimated, after taking account of government bond issuance of HK$155 billion and repayments of HK$51.7 billion. Fiscal reserves are expected to hit HK$657.2 billion by March 31, 2026.

For the financial year of 2026-27, the administration forecast its expenditure and revenues will be HK843.4 billion and HK$765.2 billion respectively. The SAR government will achieve a consolidated surplus of HK22.1 billion for the year and fiscal reserves will rise to HK$679.3 billion by March 31, 2027.

“The government’s operating account has returned to a surplus this financial year. After taking into account the proceeds from bond issuance, the consolidated account has also returned to balance ahead of schedule. All these have enabled us to suitably reinforce support for the people and small and medium enterprises within our means,” Chan said while delivering the Budget 2026-27.

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The finance chief forecasted Hong Kong’s economy will expand 2.5 percent to 3.5 percent in 2026 even though uncertainties will continue to loom over global trade, and a slower-than-expected pace of US rate cuts could hamper the optimism currently underpinning the global financial market.

With the local economy continuing to expand, Chan expects the underlying inflation and headline inflation to be 1.7 percent and 1.8 percent respectively this year.

‘We forecast Hong Kong’s economy will grow on average three percent per annum in real terms from 2027 to 2030, with the underlying inflation averaging two percent a year,” Chan noted.

The finance chief said the current-term government is committed to expanding economic capacity and enhancing competitiveness, expediting the development of the Northern Metropolis, driving growth through talents and innovation and technology and developing new quality productive forces tailored to local circumstances for promoting high-quality economic development.