Hong Kong Financial Secretary Paul Chan has presented a forward-looking budget for 2026-27 that positions technological innovation as the primary engine for the region’s next phase of economic development. The budget announcement comes as Hong Kong celebrates a return to fiscal surplus in the 2025-26 financial year, attributed to robust economic performance and strengthened capital markets.
Chan revealed that Hong Kong’s operating account has achieved surplus status following increased tax revenues from economic expansion. “Overall, Hong Kong’s public finances have markedly improved,” Chan stated, acknowledging the success of fiscal consolidation measures in replenishing government coffers.
The budget outlines ambitious economic projections, with headline growth forecast between 2.5% and 3.5% for 2026, accompanied by modest inflation rates of 1.7-1.8%. Looking further ahead, the economy is expected to maintain an average annual growth rate of 3% in real terms from 2027 to 2030.
A cornerstone of the budget is its emphasis on artificial intelligence development. Chan announced the establishment of a Committee on AI+ and Industry Development Strategy, which he will personally chair, to formulate comprehensive strategies for AI integration across industries. The Hong Kong Artificial Intelligence Research and Development Institute Company Limited is scheduled to commence operations in the latter half of 2026, accelerating the transformation of research outcomes into practical applications.
Infrastructure development features prominently, with the Sandy Ridge data facility cluster offering 250,000 square meters of space to boost computational capabilities. The territory will also establish its first national manufacturing innovation center outside mainland China, supported by key developments including the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone and San Tin Technopole.
Financial sector enhancements include advancing RMB internationalization, securities market reforms, and new legislation for family office taxation and digital asset licensing frameworks. The budget also allocates HK$4 billion (approximately $512 million) to support long-term housing arrangements for Wang Fuk Court residents affected by last November’s devastating fire.
Despite projected annual deficits in the capital account due to substantial infrastructure investments, the operating account is expected to maintain surpluses through 2030-31. The government plans increased bond issuance to fund future-oriented projects, with fiscal reserves anticipated to grow beyond HK$700 billion during this period.