Potential swing from deficit to surplus amid continued growth, Paul Chan says

Hong Kong’s economy is expected to maintain growth momentum in the third quarter, and the government’s operating account may swing from a projected deficit to a surplus this fiscal year, says Financial Secretary Paul Chan Mo-po.

On a Sunday radio program, Chan attributed the possible turnaround to revenue growth and cost control measures. However, he noted that land sales have yet to recover to previous levels, and accelerated spending on the Northern Metropolis development means the consolidated account is still expected to post a deficit.

Meanwhile, Chan said the city’s economy expanded about 3 percent in the first quarter and, buoyed by strong export performance, continued to grow in the second quarter.

While growth in the third quarter may not match that pace, the government hopes the return of tourists, a series of major events, and a possible start to US rate cuts in September could help support asset markets and business sentiment, he added.

Hong Kong stocks have seen active trading in recent weeks, which Chan said reflects international investors and capital focusing on returns rather than political narratives. He noted that since Beijing rolled out support measures in September and November last year, capital inflows from Europe, the United States, and elsewhere have increased.

Still, Chan cautioned that rapid capital movements could pose risks to financial stability and spill over into the wider economy, urging vigilant monitoring.

STAFF REPORTER