Timeline
February 25, 2026 — February 28, 2026
Business
Timeline: How Hong Kong's Budget Returned to Surplus After Years of Deficits
Hong Kong's Financial Secretary Paul Chan Mo-po announced a surprise budget surplus of HK$2.9 billion on February 25, 2026, ending the city's longest stretch of deficits in two decades. This timeline tracks the budget announcement, its key spending initiatives, public reaction, and the government's subsequent efforts to defend controversial funding decisions over four days.
11 events · 3 days · 19 source articles
Wed, Feb 25, 2026
Major
Hong Kong Returns to Budget Surplus After Two Decades of Deficits
Financial Secretary Paul Chan Mo-po announces Hong Kong's first consolidated surplus in four years, recording HK$2.9 billion for the 2025-26 financial year. The surprise turnaround ends the city's longest stretch of deficits in two decades, driven by a buoyant stock market and stabilizing property sector. The government pledges billions in technology spending and tax relief for over 2 million people.
Wed, Feb 25, 2026
Major
Government Announces HK$22 Billion in Sweeteners and Tax Relief
Chan delivers a two-hour budget address outlining HK$22 billion in sweeteners to residents and businesses, nearly triple the HK$7.8 billion offered last year. Key measures include raising basic tax allowances from HK$132,000 to HK$145,000 and increasing the economic growth forecast to 2.5-3.5%. The budget emphasizes investment in AI, intellectual property, and aerospace sectors while maintaining a 2% cap on recurrent spending.
Wed, Feb 25, 2026
Major
HK$30 Billion Allocated to Northern Metropolis Megaproject
The budget sets aside HK$30 billion to kick-start the Northern Metropolis development, with HK$10 billion each going to companies overseeing the Hetao Hong Kong Park, San Tin Technopole, and Hung Shui Kiu Industrial Park. The government aims to accelerate the megaproject through public-private partnerships with developers and tech enterprises.
Wed, Feb 25, 2026
Major
Rare HK$150 Billion Transfer from Exchange Fund Announced
Chan reveals a controversial plan to transfer HK$150 billion from various funds, including HK$75 billion from Exchange Fund investment income, HK$37 billion from the Bond Fund, and HK$15.8 billion from other government funds. This rare move from the city's de facto sovereign wealth fund raises immediate concerns about financial stability. The transfers contribute to fund movements totaling HK$127.83 billion.
Thu, Feb 26, 2026
Moderate
Public Backlash Emerges Over Insufficient Relief Measures
Chan defends his budget on a radio forum amid public criticism that sweeteners are insufficient for ordinary residents. Callers express disappointment with the lack of direct support while the government prioritizes long-term infrastructure investments. Chan emphasizes the need to balance immediate relief with sustainable long-term investments and announces plans to brief credit-rating agencies and the IMF on the Exchange Fund transfer.
Thu, Feb 26, 2026
Moderate
Strong IPO Market and Bond Sales Credited for Surplus Recovery
Analysis reveals that Hong Kong's return to surplus was driven by robust initial public offerings and bond sales, exceeding expectations. The city had previously projected a HK$67 billion deficit for 2025-26 but instead achieved a HK$2.9 billion surplus. Economists express optimism about the 2026-27 outlook, citing a stabilized property market and strong government revenue transfers.
Fri, Feb 27, 2026
Moderate
Budget Priorities Revealed: Tech Departments Win, Environmental Branch Loses
Department-by-department budget analysis shows innovation and technology, intellectual property, and investment promotion departments receiving increases of at least 10% despite a 2% cap on recurrent spending. The Home and Youth Affairs Bureau expands its workforce by 16%, while the environmental branch faces a sharp 70% cut and public broadcaster sees a 28% reduction. Overall civil service headcount shrinks by 2%.
Fri, Feb 27, 2026
Moderate
Budget Aligns with China's Five-Year Plan, Focuses on 'AI+' and 'Finance+'
State media reports emphasize that Hong Kong's budget proactively aligns with China's 15th Five-Year Plan and advances development around two central pillars: 'AI+' and 'Finance+'. The strategy is expected to reinforce Hong Kong's core competitiveness and support a steady shift toward stronger, more robust economic growth.
Fri, Feb 27, 2026
Moderate
Finance Chief Defends Bond-Driven Growth Strategy
Chan addresses concerns about rising debt levels after proposing to raise the borrowing cap from HK$700 billion to HK$900 billion. On a radio program, he assures a university student worried about generational debt that the city can manage repayments and expresses confidence in long-term investment returns from the Northern Metropolis. He describes the bond approach as 'balanced' for fast-tracking development.
Sat, Feb 28, 2026
Minor
Analysis Credits Buoyant Markets for Fiscal Turnaround
Commentary highlights that the return to surplus is driven largely by a buoyant stock market and stabilizing property sector, which revived stamp duty revenues and investment income. The budget marks the first adjustment to tax allowances since 2016-17, demonstrating the government's commitment to addressing cumulative inflation. However, sustainability of the surplus remains a key concern.
Sat, Feb 28, 2026
Major
No Further Exchange Fund Transfers Planned for Five Years
Chan clarifies that no additional Exchange Fund transfers are planned in the next five years according to the medium-range forecast, seeking to allay concerns about the HK$150 billion withdrawal. He emphasizes this will not become normal practice and the transfer is a one-time measure to support infrastructure development. The assurance aims to address ongoing worries about Hong Kong's financial stability.
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