Financial Secretary Paul Chan stated in his blog today (Jan. 11) that the new fiscal year's budget will be announced on Feb. 25. Because returns on infrastructure investments often only become apparent after completion, and with increased government investment in public works projects, this year's capital account is still expected to record a deficit.
Chan mentioned that the public consultation for the fiscal budget has been underway for nearly a month, during which the government has met with various sectors of society, industry representatives, organizations, and citizens to listen to their thoughts and opinions. He pointed out that in different consultation settings, there was consensus that, from a macro perspective, Hong Kong's economy is steadily recovering after the pandemic. Taking the financial industry as an example, which accounts for 26% of Hong Kong's GDP, its strong performance last year has generated greater market demand and positive expectations for related sectors. As for the trade industry, which makes up 15% of GDP, robust exports last year also supported the overall economy. Additionally, major events have attracted more tourists to Hong Kong, further boosting the city's atmosphere.
Chan noted that as international geopolitical tensions intensify, there is a possibility of increased market volatility in the future, making it essential to focus on developing new economic growth engines. He emphasized that the government will actively promote the accelerated development of the Northern Metropolis in the future. However, since returns on infrastructure investments often only materialize after completion, and with increased government investment in public works projects, this year's capital account is still expected to record a deficit. Moving forward, the government will leverage market forces, including the appropriate issuance of bonds, to support infrastructure development. Currently, the Hong Kong Special Administrative Region government's outstanding debt relative to GDP is only about 12%, which remains at a very healthy level internationally.
Chan added that with the rapid transformation driven by "AI+," the government will better empower industries, businesses, and the general public through technology. Furthermore, government expenditures in education, healthcare, and social welfare account for nearly 60% of total government spending. In the future, resources will be allocated more precisely, and efficiency will be enhanced to ensure that limited public resources are used effectively and sustainably to maintain public services.
He pointed out that this year marks the beginning of the country's 15th Five-Year Plan. The nation's commitment to high-level two-way openness, promoting self-reliance and self-improvement in science and technology, and deepening the integration of technological and industrial innovation presents new opportunities for Hong Kong as an international financial, trade, shipping, and innovation hub. Traditional advantageous industries must focus on enhancing "quality," while emerging industries should pursue rapid "quantity" growth to accelerate and stabilize Hong Kong's economic development. Over the next month or so, the government will continue to engage with various sectors of society, listen and communicate extensively, and gather insights. Through the new fiscal budget, the aim is to better unleash economic potential, strengthen development momentum, benefit people's livelihoods, and jointly build a brighter future.
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