The 2025-26 Budget was released last week (Feb 26) by Mr Paul Chan, Financial Secretary of the Hong Kong Special Administrative Region, with the theme of "Accelerating Development through Reform and Innovation". See below for a snapshot of measures and economic outlook. More details are available from the budget website.
Innovation and Technology
* $1 billion to establish the Hong Kong Artificial Intelligence Research and Development Institute
* Host inaugural International Conference on Embodied AI Robot and International Young Scientist Forum on Artificial Intelligence
* Host WIPO’s publication event of the top 100 science and technology clusters this year
* $100 million earmarked to launch Pilot Manufacturing and Production Line Upgrade Support Scheme
* Study streamlining vetting of licence applications for operating Low Earth Orbit satellites
* HKEX to launch dedicated “TECH” channel to help prepare for listing applications
Finance
* Improve vetting process and optimise thresholds for listing
* Enhance the “board lot” system and issuance mechanism for structured products; increase position limits for key index derivatives
* Explore enhancing preferential tax regimes for funds and single family offices
* Host the Hong Kong Global Financial and Industry Summit and a flagship forum on fixed income and currencies
* Extend pilot grant scheme on insurance-linked securities for 3 years
* Implement linkage of faster payment systems with Mainland China
Shipping and Aviation
* Propose provision of half-rate tax concessions to eligible commodity traders
* Establish the Hong Kong Maritime and Port Development Board
* $210 million to install the port community system for smart port development
* Aviation Academy to expand training programmes to cover C919 aircraft-related subjects
* Promote Hong Kong’s development into Asia’s first aircraft dismantling, parts recycling, processing and trading centre
Economic Performance in 2024
* GDP growth: 2.5%
* Unemployment rate: 3.1% (latest)
* Headline inflation: 1.7%; underlying inflation 1.1%
Economic Prospects for 2025
* GDP growth forecast: 2% to 3%
* Headline inflation forecast: 1.8%; underlying inflation: 1.5%
Revenue and Expenditure
* Total Government Revenue 2025-26: $659.4 billion
* (Profits tax: $192.2b; Land premium: $21b; Stamp duties: $67.6b; Investment income: $51.8b; Salaries tax: $96.5b; Other revenue: $230.3b)
* Total Government Expenditure 2025-26: $822.3 billion (Social welfare: $139.1b; Health: $141b; Education: $112.4b; Infrastructure: $119.3b; Economic: $61b; Security: $69b; Environment and Food: $53.5b; Others (including community and external affairs): $127b