Hong Kong records HK$2.9 billion consolidated surplus for 2025-26. Here’s how

A combination of a strong initial public offering (IPO) market and bond sales has helped put Hong Kong’s financial health back in the black sooner than expected, with analysts expecting a robust pipeline of listings to be key to sustaining the city’s surplus.

In his budget speech on Wednesday, Financial Secretary Paul Chan Mo-po said the city was previously expected to record a HK$67 billion deficit for the 2025-26 financial year, which ends on March 31, but emerged with an estimated HK$2.9 billion consolidated surplus.

Some economists on Thursday expressed optimism regarding the outlook for 2026-27, pointing to factors such as the stabilised property market and the transfer of billions of Hong Kong dollars between government funds or accounts.

Billy Mak Sui-choi, an associate professor at Baptist University’s accountancy, economics and finance department, attributed the operating surplus in 2025-26 directly to the bustling stock market, noting that robust turnover and listing activities were the primary engines for government revenue.

“The main reason is that in the past year … Hong Kong stock turnover was much larger, so government stamp duty [revenue] increased by a lot, by tens of billions,” he said.

Lee Shu-kam, head of Hong Kong Shue Yan University’s economics and finance department, expressed optimism that a compounding effect from new companies coming to Hong Kong, a booming stock market and a recovering property sector would mutually reinforce one another to sustain higher tax revenues.