(Budget 2024-25) HK posts deficit of $101b, expects reserves to decrease by $48b in new fiscal year

Hong Kong posted a consolidated deficit of HK$101.6 billion for the fiscal year 2023-24 while the reserves are expected to be HK$733.2 billion by the end of March, finance chief Paul Chan Mo-po said. 

The revised estimate on government revenue is HK$554.6 billion in 2023-24, lower than the original estimate by 13.7 percent or HK$87.8 billion. 

Revenue from land premium is HK$19.4 billion while revenue from stamp duty is HK$50 billion. Revenue from profits tax and salaries tax is HK$171.2 billion and HK$79.2 billion respectively. 

The revised estimate of total government expenditure for 2023-24 is HK$727.9 billion, decreased by 10.2 percent compared to the previous year. 

Chan also noted that the government revenue for 2024-25 is estimated to be HK$633 billion, while earnings and profits tax are estimated to be HK$279.6 billion, increasing by 6.8 percent. 

Taking into account the bond issuance of HK$120 billion in 2024-25, it is expected that there will be a deficit of HK$48.1 billion for the year, and fiscal reserves will decrease to HK$685.1 billion, down HK$48.1 billion. 

“Looking ahead, the external environment will remain complicated in the coming year. As a small and externally-oriented economy, Hong Kong’s economic growth will inevitably be affected,” Chan said. 

Chan noted that revenues related to asset market will still require some time to fully recover, adding that the government will continue to provide resources for strengthening momentum on economic growth and enhancing public services.