‘Steady as she goes’ as Hong Kong bids farewell to deficits
South China Morning Post
by Neil Denslow,Raymond MaFebruary 25, 2026
AI-Generated Deep Dive Summary
Hong Kong is signaling a turn toward economic stability and growth, with its Financial Secretary Paul Chan announcing an upbeat budget speech. The city has raised its economic growth forecast to between 2.5 per cent and 3.5 per cent for the year, reflecting improved confidence in its financial trajectory. A key highlight of the budget address was the early elimination of deficits, with a projected consolidated surplus of HK$2.9 billion for the financial year ending next month—a stark improvement from earlier forecasts of economic expansion at just 2 per cent. This shift is attributed to robust economic growth and a surge in stock trading activity.
The announcement underscores Hong Kong’s ability to adapt and recover despite global economic uncertainties. By diversifying its growth strategies and prioritizing innovation, the city aims to bolster long-term economic resilience. Chan emphasized the importance of fostering new industries and enhancing research and development capabilities, signaling a strategic shift toward sustainable growth beyond traditional sectors like finance and tourism. This focus on innovation aligns with broader regional trends and positions Hong Kong as a hub for cutting-edge industries.
The move to end deficits ahead of schedule is not only a financial milestone but also a political win for the government, showcasing effective economic management. The surplus will likely be used to fund infrastructure projects, social initiatives, and further investments in technology and education. These measures are expected to attract foreign investment, reinforce Hong Kong’s status as an international business center, and create new opportunities for local businesses and job seekers.
For global readers, this development highlights Hong Kong’s role as a bellwether for economic stability in the Asia-Pacific region. Its recovery from past challenges and its pivot toward innovation-driven growth offer valuable insights into managing economic transitions. As Hong Kong continues to navigate the complexities of global trade and technological advancements, its progress will be closely watched by investors, policymakers, and economists worldwide.
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Originally published on South China Morning Post on 2/25/2026