Hong Kong’s Financial Secretary Paul Chan Mo-po has underscored the necessity of keeping substantial fiscal reserves to weather geopolitical shocks and support long-term development, even as the city anticipates a budget surplus for the current financial year.

Chan highlighted that the Hong Kong government recorded a HK$43.9 billion operating surplus in the first nine months of the fiscal year, bolstered by strong export performance to Southeast Asia and buoyant financial markets.

However, he cautioned that government revenue is expected to taper off after January and that expenditure will exceed income in the closing months of the fiscal cycle.

Speaking on a radio programme on Saturday, Chan said that while residents’ calls for immediate financial relief are understandable, prudence is critical when managing public finances.

He stressed that the government must balance current social needs with commitments to strategic, long-term projects such as the Northern Metropolis infrastructure plan.

Chan emphasised that geopolitical complexities — including fluid capital flows and the potential actions of speculators — necessitate a strong cash buffer to reassure markets and protect against sudden economic turbulence.

To sustain development momentum, the government also plans to issue bonds to support capital account projects, even as the operating account is expected to remain in surplus.

Chan said that retaining sufficient reserves will enable Hong Kong to withstand financial pressures and make informed decisions on infrastructure and growth priorities.

While acknowledging differing views on fiscal incentives, he reiterated that the administration would adopt a cautious fiscal stance to ensure resilience against external risks and to position the city for stable growth in a challenging global environment.

Chan expressed cautious optimism regarding the city’s economic outlook, pointing to stable national development and steady growth prospects this year.