Govt Surplus Expected For This Financial Year

The Financial Secretary, Paul Chan, on Wednesday said he expects the government to face a deficit in the upcoming fiscal year, even though a surplus is predicted to return in the 2023-24 financial year.

For the current 2021-22 fiscal year, Chan said he expects a budget surplus of HK$18.9 billion instead of a deficit he estimated a year ago. This will be the first year since 2019 the government budget is in the black.

He said that is because of higher-than-expected revenue from land premium and profits tax.

For 2022-23, he's forecasting a deficit of HK$56.3 billion due to one-off relief measures and anti-epidemic expenditure announced in this budget.

There will then be a surplus in the subsequent four years until 2027. "The above forecast has not taken into account any tax rebate or relief measure that the government may implement over the coming four years,” Chan said.

On GDP, Chan expects an annual growth of 3 percent from 2023 to 2026.

The finance chief added that fiscal reserves are estimated at HK$1.065 trillion by the end of March 2027, representing 28.9 percent of GDP, or equivalent to 16 months of government expenditure.

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