Hong Kong approves flat 2% civil service pay rise amid fiscal caution

Hong Kong's top decision-making body, the Executive Council, has approved a flat 2% pay rise for all civil servants, effective April. The decision adds HK$6 billion (US$765.7 million) to the government's annual expenditure. Secretary for the Civil Service Ingrid Yeung Ho Poi-yan justified the raise as necessary to recognize performance while maintaining fiscal prudence given a volatile geopolitical landscape and Hong Kong's status as an open economy. She emphasized the raise follows an established mechanism considering economic conditions and cost of living, but also factors in future development needs.

When questioned on public sentiment, Yeung stated it is incorporated into all decisions by the chief executive and the Executive Council, including this pay rise. The 2% increase is notably smaller than previous years, reflecting broader budget constraints amid a challenging global environment. Critics argue the raise does not match inflation or rising living costs, but the government maintains it strikes a balance between rewarding civil servants and managing public finances responsibly. The move is expected to affect over 170,000 civil servants across various grades.