Hong Kong records HK$2.9 billion consolidated surplus for 2025-26. Here’s how

Hong Kong's government, led by Financial Secretary Paul Chan, has announced a significant fiscal turnaround for the 2025-26 financial year, ending with an estimated HK$2.9 billion consolidated surplus. This result starkly contrasts with the HK$67 billion deficit that was projected, marking a positive shift in the city's financial health. The reversal was achieved sooner than anticipated, driven primarily by a resurgence in the capital markets. A combination of a strong initial public offering (IPO) pipeline and government bond sales provided critical revenue, with analysts highlighting that robust stock market turnover and listing activities were the primary engines for this recovery.

Economists like Billy Mak Sui-choi of Baptist University directly attribute the operating surplus to the bustling stock market, noting that a significant increase in stamp duty revenue—by tens of billions of Hong Kong dollars—was the key driver. Looking ahead to the 2026-27 financial year, experts express optimism, pointing to a stabilized property market and the strategic transfer of finances between government funds as factors that will sustain the surplus. Lee Shu-kam of Hong Kong Shue Yan University anticipates a compounding positive effect from new companies listing in Hong Kong, a continued booming stock market, and a recovering property sector, all mutually reinforcing to sustain higher tax revenues. This fiscal improvement suggests a more resilient economic outlook for the city as it navigates post-pandemic recovery.