Hong Kong’s authorities are anticipating GDP growth of between 2.5% and 3.5% in 2026 and expect the territory’s public finances to improve following several consecutive years of budget shortfalls, Financial Secretary Paul Chan said in his annual budget address.
Chan described 2026 as a year in which the economy should stay resilient, and he framed the outlook as a turning point toward healthier fiscal outcomes after the strain of past deficits.
In his remarks, Chan acknowledged that the global environment will continue to present significant challenges. He singled out rising protectionism among major economies and the ongoing fragmentation of global trade and economic links as persistent headwinds. At the same time, he identified the growing influence of the so-called Global South and evolving patterns in trade and investment as potential sources of fresh markets and growth opportunities for Hong Kong.
The budget speech also emphasized a strategic reorientation toward technology and artificial intelligence. Chan said the government will intensify efforts to harness tech and AI as levers to deepen integration with the mainland’s national policy framework known as the Five-Year Plan. This emphasis on advanced technology comes amid ongoing trade tensions and economic difficulties in China, which Chan noted as contextual pressures shaping policy choices.
To operationalize closer alignment with Beijing’s priorities, Chan announced that the Chief Executive will chair a cross-bureau, cross-departmental task force charged with coordinating Hong Kong’s activities in step with China’s 15th Five-Year Plan. Separately, he said the city will develop its own five-year plan for the first time, a move intended to provide a tailored, medium-term policy roadmap.
Chan framed these steps as part of a broader strategy to position Hong Kong for new trade and investment flows while addressing short-term fiscal repair. He reiterated that the government intends to steer public finances back toward stronger balance as economic conditions permit.
Context and outlook
The government’s projection of 2.5% to 3.5% growth and the commitment to reduce the fiscal deficit underscore a twin focus on restoring budgetary strength and capturing opportunities from shifting global markets, with technology and AI central to that agenda.