Key Highlights
- π‘ Economic Growth: Forecasted GDP growth of 2-3% for 2025, rising to 2.9% annually from 2026-2029.
- π€ AI & Tech Investments: $1B allocated for AI R&D, supercomputing centers, and microelectronics institutes.
- ποΈ Northern Metropolis: $3.7B for infrastructure to develop tech hubs, logistics, and tertiary education zones.
- πΌ Talent & Enterprise Attraction: 270K talent approvals, $67.7B in foreign investments secured.
- π± Green Transition: $300M EV charging subsidies, SAF adoption at HKIA, and a $10B green tech fund.
Fiscal Strategy & Support Measures
- π Deficit Management: $87.2B deficit for 2024-25, with plans to reduce through bond issuance ($150B annually) and expenditure cuts.
- π° Tax Relief: Salaries/profits tax cuts capped at $1,500; stamp duty adjustments for properties under $4M.
- π Public Transport: Revised $2 fare scheme for elderly (240 monthly trips cap) and PTFSS threshold raised to $500.
Sectoral Priorities
- π¦ Financial Hub: Expand RMB trading, virtual asset regulations, and $5.8B catastrophe bonds issued.
- βοΈ Aviation & Maritime: Develop smart ports, aircraft parts trading center, and green shipping fuel initiatives.
- π Cultural & Tourism: $1.2B for HKTB, mega events at Kai Tak Sports Park, and eco-tourism promotions.
Bad News
- π Fiscal Deficit: A deficit of $87.2 billion is projected for 2024-25, with a cumulative reduction in government recurrent expenditure by 7% through 2027-28.
- π Property Market Challenges: Residential property prices fell by 7% in 2024, and the non-residential property market remains stagnant.
- πΌ Job Cuts: The civil service establishment will be reduced by 2% each in 2026-27 and 2027-28, resulting in the deletion of about 10,000 posts.
- π« Public Transport Fare Adjustments: The $2 fare scheme for the elderly will be capped at 240 trips per month, and the PTFSS threshold will be raised to $500, reducing subsidies for some users.
- π Revenue Shortfalls: Revenue from land premium and stamp duties has declined significantly, with land premium revenue falling short by $19.5 billion and stamp duties by $13 billion.
Good News
- π‘ Economic Growth: Hong Kong’s economy is forecasted to grow by 2-3% in 2025, with a steady rise to 2.9% annually from 2026-2029.
- π€ AI & Tech Investments: $1 billion allocated for AI R&D, supercomputing centers, and microelectronics institutes to drive innovation.
- ποΈ Northern Metropolis Development: $3.7 billion earmarked for infrastructure to develop tech hubs, logistics, and tertiary education zones.
- πΌ Talent & Enterprise Attraction: 270,000 talent approvals and $67.7 billion in foreign investments secured, boosting the local economy.
- π± Green Transition: $300 million EV charging subsidies, SAF adoption at HKIA, and a $10 billion green tech fund to promote sustainability.
- π° Tax Relief: Salaries and profits tax cuts capped at $1,500, providing financial relief to individuals and businesses.
- π Cultural & Tourism Boost: $1.2 billion allocated to the Hong Kong Tourism Board for mega events and eco-tourism promotions.
Looking Ahead
The budget underscores Hong Kongβs commitment to balancing fiscal discipline with strategic investments in technology and sustainability. By leveraging its role as a “super connector” between Mainland China and global markets, the city aims to solidify its position as a leading international hub while addressing challenges like an aging population and geopolitical uncertainties.
