The Budget Speech by the Financial Secretary outlines the revised estimates for 2025-26 and 2026-27. The total government revenue for 2025-26 is estimated at $688.8 billion, and expenditure is $789.2 billion, resulting in a surplus of $51.3 billion. For 2026-27, total expenditure is expected to increase by 6.9% to $843.4 billion, with recurrent and non-recurrent expenditures rising respectively. Several policy initiatives and measures are proposed to support the economy, and fiscal reserves are projected to be $679.3 billion by the end of 2026.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On 25 Feb 2026, the Financial Secretary delivered the Budget Speech, presenting revised estimates for 2025-26 and 2026-27.
The revised estimate for total government revenue in 2025-26 stood at $688.8 billion, an increase of 4.5% over the original estimate, driven by a robust equity market and accelerated economic growth.
Key drivers included a substantial revision of stamp duties revenue ($99.5 billion) and profits tax revenue ($16.8 billion). However, the residential and commercial property markets' sluggish performance resulted in a lower land premium revenue estimate of $17.5 billion.
Total government expenditure for 2025-26 was reduced to $789.2 billion, down by $33.1 billion from the original estimate. Recurrent expenditure dropped to $572.4 billion, and the Operating Account recorded a surplus of $51.3 billion, reversing an originally forecast deficit of about $3 billion.
The Consolidated Account projected a surplus of $2.9 billion, due to the issuance and repayment of government bonds, instead of the originally estimated deficit of about $67 billion. By March 31, 2026, fiscal reserves were anticipated to reach $657.2 billion.
For 2026-27, the Budget projected an increase in total government expenditure by 6.9% to $843.4 billion. Recurrent expenditure was expected to rise by 4.8% to $599.7 billion, with non-recurrent expenditure up by 36.9% to $40.5 billion.
Revenue from land premium was estimated at $18 billion and stamp duties revenue at $101 billion, contributing to an estimated Operating Account surplus of $11.9 billion. The Capital Account projected a deficit of $90.1 billion.
To mitigate economic pressures, the Budget proposed various measures, including property rate concessions, salary tax reductions, profits tax cuts, and an allowance for eligible social security recipients, totaling an additional expenditure of about $6.5 billion.
Starting from 2026/27, several allowances were scheduled to increase, reducing tax revenue further.
The Medium Range Forecast projected real economic growth of 3% from 2026-27 to 2030-31, with the ratio of total government expenditure to GDP expected to decrease from 24.2% to 21.5% over the same period.
The speech emphasized Hong Kong's economic transformation amidst a volatile global environment, leveraging its strengths to attract talent, enterprises, and capital. The 30th anniversary of Hong Kong's return to the Motherland was highlighted as an opportunity to create a brighter future.
The cover of the budget, adorned in purple, symbolized elegance, charm, calmness, and perseverance. The speech concluded with an expression of confidence and determination to advance Hong Kong's economy.
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