Hong Kong doubles deficit forecast to HK$100 billion for 2024-25

Finance chief says soft property market has hit government coffers hard, with income ‘far lower than expected’

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Finance chief Paul Chan has said the government’s deficit will balloon to HK$100 billion in 2024-25. Photo: Dickson Lee

Published: 11:13am, 2 Dec 2024Updated: 10:40pm, 2 Dec 2024

Hong Kong’s deficit will more than double to HK$100 billion (US$12.8 billion) in the 2024-25 financial year from the previously forecast HK$48 billion, the finance chief has said, with the city feeling the pinch from a property slump and weakened corporate performance.

At a meeting of the Legislative Council’s financial affairs panel on Monday, Paul Chan Mo-po revealed the deficit was substantially worse than what he estimated at the beginning of this year as the soft property market had taken a heavy toll on the government’s income generated by land sales, stamp duty and corporate taxes.

“The government’s income was far lower than expected,” the financial secretary said. “Before September, property transactions were very slow, which affected our stamp duty income.”

The latest deficit estimate at HK$100 billion was similar to the 2023-24 level of HK$101.6 billion.

According to the latest official figures, land sales from April to September brought about HK$4.5 billion in revenue, accounting for only 13.6 per cent of the original estimate. Revenue from stamp duties, meanwhile, was HK$24 billion, 33.8 per cent of the budget estimate.

Overall government revenue reached HK$117.6 billion, 18.6 per cent of the estimate.