PwC (PricewaterhouseCoopers) stated today (Jan. 19) that it expects the government's operating account for the 2025/26 fiscal year to record a surplus. Although capital expenditures on public works remain high and revenue from land sales has decreased—leading to a projected deficit in the capital account—the operating surplus is anticipated to offset these effects partially. As a result, the overall consolidated deficit is estimated to be only around HK$2 billion, a significant reduction from the government's initial forecast of a HK$67 billion deficit.
PwC explained that sluggish property transactions throughout 2025 have affected land sale revenue, which is estimated to be approximately HK$13 billion, 38% lower than the government's original projection of HK$21 billion. Revenue from profits tax and salaries tax is expected to reach HK$282 billion, 5% below the initially forecasted HK$297 billion. However, driven by a robust stock market, stamp duty revenue is projected to reach HK$100 billion, about 48% higher than the budgeted estimate of HK$67.6 billion.
PwC estimates that by March 31, 2026, fiscal reserves will amount to HK$654.1 billion, equivalent to approximately 10 months of government expenditure. This represents the lowest level of fiscal reserves recorded by the government (on par with the 2024/25 fiscal year), while the highest level historically corresponded to 28 months of expenditure.
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