BREAKING: Kong logs HK$51 billion surplus ending three years of deficit

2026-02-25 - 05:15

The Hong Kong government has recorded a budget surplus of HK$51.3 billion after three continuous years in the red, Financial Secretary Paul Chan has announced in his 2026 budget speech. Financial Secretary Paul Chan reading out the budget address in the Legislative Council on February 25, 2026. Photo: Kyle Lam/HKFP. Chan, delivering his address at the Legislative Council on Wednesday, announced the estimated surplus after the government gradually narrowed a deficit over the course of three years, driven by an increase in profits tax and stamp duties. The government’s operating account for 2025‐26, which covers day-to-day spending and revenue, was originally expected to record a deficit of about HK$3 billion. Chan cited “buoyant equity market and an accelerated economic growth.” However, he remained cautious on land premiums: “[A]s the residential property market has just stabilised while the commercial property market remains relatively sluggish, government revenue from land premium stays low with the revised estimate at HK$17.5 billion, lower than the original estimate by HK$3.5 billion.” Earlier in his speech, Chan pointed to 3.5 per cent growth in the overall economy. “External trade remained strong, private consumption rebounded, and fixed investment accelerated,” he said. The city logged a HK$80.3 billion deficit in the 2024-25 fiscal year marking the third shortfall in a row, after recording and HK$101.6 billion deficit the previous year, and a HK$122 billion shortfall in 2022-23. See also: LIVE: Hong Kong Budget 2026 The finance chief last year said that the government would cut spending by 7 per cent for three years. Chan said in a Sunday blog post that the city has made a “good start” building on the economic growth recorded last year. “Nevertheless, amid a volatile external environment and uncertainties arising from economic transformation, we must exercise fiscal prudence,” he said. “We will take into account the needs of our society in the short, medium and long term, while maintaining adequate reserves to meet unforeseen circumstances.”