<div id="readability-page-1">Hong Kong’s financial chief has revised the city’s fiscal surplus for the previous year to HK$11 billion (US$1.91 billion), nearly four times the original estimate, saying the ongoing Middle East conflict had a limited impact on the economy with gross domestic product (GDP) growth remaining strong in the first quarter. Financial Secretary Paul Chan Mo-po also dismissed concerns that increased bond issuance to fund the Northern Metropolis megaproject would burden future generations as “overly alarmist,” as lawmakers approved his annual budget on Wednesday. Speaking ahead of the vote, Chan said the surplus was revised to HK$11 billion, HK$8.1 billion higher than the HK$2.9 billion originally forecast in the budget. The government’s consolidated account returned to the black in the 2025-26 financial year, after three consecutive years of deficits. Chan reassured lawmakers that the administration had prepared for various scenarios amid volatile geopolitical conditions, noting that Hong Kong, as a small and open economy, would inevitably be affected by the external environment. “Heightened geopolitical tensions have posed risks of an economic downturn, and we are closely monitoring the developments in the Middle East and the impact of rising international fuel prices,” Chan said. He said Hong Kong’s economy was dominated by services, and exports to the Middle East accounted for a relatively small share, “so the direct impact on the overall economy is limited.” Chan added that the city’s first-quarter gross domestic product (GDP), with preliminary estimates due next Tuesday, maintained strong momentum, though fuel-intensive sectors such as transport were under pressure from rising operating costs. Chan emphasised that mainland China’s stable development and strong support continued to act as “ballast” for Hong Kong and expressed confidence that the city had the capacity to withstand external shocks with its solid economic fundamentals and fiscal buffers.  In his February budget, Chan unveiled an array of policies to bolster the city’s innovation and artificial intelligence (AI) sectors, including transferring HK$150 billion from the Exchange Fund to support the Northern Metropolis and other infrastructure initiatives, and establishing a committee on AI+ strategy to drive industrial reform. The metropolis aims to turn 30,000 hectares (74,132 acres) of land into a new engine for economic growth with a population of about 2.5 million and around 650,000 jobs by 2034. During the budget debate, some lawmakers voiced concerns over the rare move to tap the Exchange Fund – a cornerstone of the Linked Exchange Rate System and Hong Kong’s financial stability – and to increase bond issuance to fund the project. Chan dismissed worries that such a move could undermine the city’s financial stability or burden future generations. “I believe these comments are overly alarmist,” Chan said, stressing the importance of investing in the megaproject for the city’s long-term development. “If we fail to seize the opportunity to attract foreign enterprises, promote I&amp;T development and diversify our economic structure, thereby providing our next generation with more and better employment opportunities, then that would truly be irresponsible.” The appropriation bill was eventually passed by a show of hands. When asked by the media about veteran lawmaker Junius Ho Kwan-yiu being the only legislator not to back the budget, Chan thanked the majority for endorsing his blueprint and said that Ho’s vote was inconsequential. </div>

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<p>Hong Kong's financial chief revised the city's fiscal surplus for the previous year to HK$11 billion (US$1.91 billion), nearly four times the original estimate. Financial Secretary Paul Chan Mo-po stated that the ongoing Middle East conflict had a limited impact on the economy, with strong GDP growth in the first quarter. He dismissed concerns about increased bond issuance for the Northern Metropolis megaproject as "overly alarmist." The government’s consolidated account is expected to return to surplus in the 2025-26 financial year after three years of deficits.</p>

- Hong Kong's Financial Secretary has revised the city's fiscal surplus for the previous year to HKD 11 billion (USD 1.91 billion), nearly four times the initial estimate, while noting limited economic impact from the Middle East conflict and strong GDP growth in Q1.  
- The government has received legislative approval for its annual budget, which includes moving HKD 150 billion from the foreign exchange fund to support major infrastructure projects in the Northern Metropolis.  
- Financial Secretary Paul Chan emphasized the importance of these investments for Hong Kong's long-term development, dismissing concerns over potential burdens on future generations.

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Hong Kong surplus hits HK$11 billion as finance chief ‘monitors’ Mideast war