Fiscal prudence is vital if Hong Kong is to fund the Northern Metropolis and other costly development plans in an uncertain geopolitical climate
3-MIN READ3-MINRegina IpPublished: 5:30am, 8 Mar 2026Financial Secretary Paul Chan Mo-po delivered his latest budget on February 25. Over the past decade, under his stewardship, Hong Kong has weathered multiple economic shocks and recently returned to a respectable growth rate of 3.5 per cent. Yet the tasks ahead are formidable: addressing a structural fiscal deficit in the city’s capital account while ensuring sufficient resources for future growth, all against an increasingly volatile and dangerous global backdrop.Article 107 of Hong Kong’s Basic Law requires the government to “follow the principle of keeping the expenditure within the limits of revenues in drawing up its budget, and strive to achieve a fiscal balance”.
Fiscal pressures were intensified by the package of initiatives for underprivileged groups announced in January 2020 by then chief executive Carrie Lam Cheng Yuet-ngor. Measures such as more generous old-age allowances and lowering the qualifying age for transport concessions to 60 are estimated to have added at least HK$100 billion annually to public expenditure, increasing the government’s long-term fiscal burden.
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