Hong Kong budget 2024-25: City will return to fiscal balance in 2 years by dipping into rainy day Future Fund, issuing bonds
- For first time in decade, government says it plans to dip further into reserves by using investment returns from Future Fund set up for rainy days
- Hong Kong has logged a deficit almost every financial year since 2019-20, with the shortfall ballooning to HK$101.6 billion in 2023-24
Hong Kong will return to a budget surplus in two years with the help of bond issuances along with measures to cut costs and raise income, authorities have revealed during Wednesday’s budget address.
For the first time in a decade, the government also said it planned to dip further into its reserves by using investment returns from the Future Fund set up for rainy days. The move would require approval from the Legislative Council.
The city has logged a deficit almost every financial year since 2019-20. In 2023-24, the deficit ballooned to HK$101.6 billion (US$17.4 billion), far higher than the initial estimate of HK$54 billion due to a substantial reduction in land premium and stamp duty income.
The deficit was expected to last until 2027-28, but the issuance of bonds in the coming years would minimise the shortfall earlier.
According to the government’s estimate, a deficit of HK$48 billion would be recorded in 2024-25, followed by a surplus of HK$6.3 billion in the 2025-26 financial year. In the subsequent year, the surplus was expected to climb fivefold to HK$32.8 billion.
The forecast did not take into account any tax rebates or relief measures that the government may implement over the coming four years.
“The issuance of Government bonds is conducive to the development of the bond market and allows the use of the capital raised from the market to drive green or sustainable and infrastructure projects,” Finance Secretary Paul Chan Mo-po said.