Hong Kong, 25 February 2026 – Hong Kong Financial Secretary Paul Chan Mo-po unveiled the city’s 2026-27 budget on Wednesday, revealing a return to fiscal surplus and a strategic shift toward innovation-led growth that aims to bolster long-term economic resilience and global competitiveness.
After three consecutive years of budget deficits, the government now expects a consolidated operating surplus of about HK$2.9 billion, a significant turnaround boosted by a vibrant stock market, strong IPO activity and a rebound in tourism.
Fiscal Surplus and Prudence
Chan highlighted the importance of maintaining a solid fiscal position while pursuing strategic investments. He reiterated that Hong Kong must exercise fiscal prudence, balancing social needs with adequate reserves to guard against future shocks amid global uncertainty.
The city’s fiscal reserves are projected to remain robust, setting the stage for both economic stability and targeted spending aimed at future growth.
Strategic Investments in Innovation and Tech Hubs
A key focus of the budget is on strengthening Hong Kong’s position as a global centre for innovation and technology. Significant funds will be directed to:
- Boost artificial intelligence (AI) and semiconductor development
- Support the expanding intellectual property (IP) economy
- Expand aerospace research and related industries
A cornerstone initiative is the allocation of approximately HK$20 billion to develop a cross-border innovation and technology hub near the Chinese mainland border, linked to the Northern Metropolis economic project. This project is designed to deepen Hong Kong’s integration with national development strategies under China’s 15th Five-Year Plan.
Industry Funding and Relief Measures
The budget includes expanded industry funding and relief measures aimed at supporting key sectors and ordinary residents. In his two-hour address to the Legislative Council, Chan proposed an array of investments and incentives, including support for emerging technology sectors and initiatives to invigorate tourism.
Measures unveiled also sought to strike a balance between strategic economic investment and fiscal discipline, including a cap on recurrent government expenditure over the next two fiscal years.
Economic Outlook and Long-Term Goals
Hong Kong’s economy is expected to remain resilient, with growth supported by asset market gains and international business activity. The expanded budget blueprint underscores the government’s commitment to transform Hong Kong into a global innovation, technology and financial hub, while enhancing its role within the Greater Bay Area and broader Asia-Pacific economic landscape.
The emphasis on IP, technology and aerospace, along with infrastructure investment, reflects a long-term vision for diversification beyond traditional sectors. Although specific relief measures for individuals and families were watched closely, Chan framed this budget as one prioritising long-term prosperity and sustainability amid a rapidly changing global environment.
