Hong Kong recurrent budget could balance in 2-3 years, HKU says

Hong Kong’s recurrent budget could return to balance within two to three years, supported by stronger equity market activity and a stabilising property sector, a senior academic said.

Tang Hei-wai, associate vice-president of the University of Hong Kong, said last year’s stock market gains lifted stamp duty revenue, while improving property market conditions are expected to support land sale income — two major sources of government revenue.

On the spending side, Tang said plans to reduce the civil service headcount should help contain payroll costs and gradually improve the government’s fiscal position.

Tang added that the Financial Secretary had projected recurrent revenue and expenditure could reach balance within three to four years, a target he said should be achievable.

Rising non-recurrent spending, such as on the Northern Metropolis and industrial development, could be financed through bond issuance, he noted.

Tang also projected that Hong Kong’s economy likely met last year’s 3.2 percent growth target and expects steady growth this year, led by continued momentum in financial markets, though the impact on other sectors remains uncertain.