Hong Kong’s rainy day Future Fund now makes up biggest share of city’s dwindling reserves, sparking calls from experts for prudence
- Structural change in fiscal reserves suggests government more likely to dip into Future Fund earlier than expected, economists say
- Fund must be used prudently or it will be in danger, academic warns
Hong Kong’s shrinking financial reserves have undergone a structural change with one component, the city’s rainy day Future Fund, making up the biggest share of the pool since last year, a review by the Post has found.
With the change, the government was more likely to dip into the Future Fund earlier than expected amid a struggling economy, experts warned. They urged officials to handle the problem with care or even set up rules for “unlocking” the fund, a contentious move authorities began in 2021.
The fund’s investment strategies and returns should also be further disclosed to ensure the reserves were maintained at a secure level to tackle potential structural budget deficits, they said.
“The Future Fund is like the emergency food supply for a hiker who gets lost on Mount Everest – you will have nothing when it’s used up,” said economist Simon Lee Siu-po, co-director of the Chinese University of Hong Kong’s International Business and Chinese Enterprise programme.
“The Hong Kong economy is now at a loss and needs to find a way out. We need to use the fund very prudently or it will be in danger.”
The city’s reserves, estimated at a decade-low HK$780 billion (US$99.7 billion) in 2023-24, are made up of operating reserves from the General Revenue Account, seven funds with designated uses, and the estimated HK$354.7 billion Future Fund.