Estimated consolidated fiscal position
In Hong Kong dollars
2022-23 government revenue and expenditure (estimated)
Total government revenue for 2022-23 is estimated to be HKD 715.9 billion (2021-22: HKD 682.7 billion) within which tax revenues (i.e., Profits Tax, Stamp Duty, Salaries Tax) account for 49.4%, followed by land premiums at 16.7% and investment income at 15.2%. Total government expenditure is estimated at HKD 807.3 billion (2021-22: HKD 698.9 billion). Education, social welfare and healthcare account for about 48.9% of total government expenditure. The government forecasts an overall consolidated deficit of HKD 56.3 billion for 2022-23 . This has taken into account the launch of countercyclical fiscal measures and the continued increase of recurrent expenditure. Hong Kong’s fiscal reserves are predicted to remain strong at about HKD 890.3 billion as at 31 March 2023. Fiscal reserves are estimated to stand at HKD 1.065 trillion by the end of March 2027, which is equivalent to roughly 16 months of government expenditures.
Source: 2022-2023 Budget Speech, HKSAR Government
Real gross domestic product growth rate
Overall, the Hong Kong economy showed a growth of 6.4% year-on-year, predominantly as a result of the continued recovery of the local economy last year. Nevertheless, border closures and other restrictions imposed on local economic activities continue to significantly disrupt Hong Kong’s catering, retail and tourism sectors. Due to the fifth wave of the pandemic, the economic outlook for 2022 will be challenging. With timely targeted measures rolled out by the government supported by healthy fiscal reserves, Hong Kong’s economy remains resilient and capable of weathering these economic headwinds.
Source: Census and Statistics Department, HKSAR Government
Underlying inflation rate
The underlying inflation rate in 2021 is estimated to be 0.6%, down 0.7 percentage point from the year before. Looking ahead, the inflation outlook for 2022 will be heavily influenced by the pace of recovery from the fifth wave of the pandemic and the pace of global economic recovery. The inflation pressure in Hong Kong should remain moderate in overall terms. It is estimated that the local economy will likely only show signs of recovery during the second half of 2022.
Source: Census and Statistics Department, HKSAR Government
Unemployment rate
The unemployment rate in Hong Kong for the period from November 2021 to January 2022 was 3.9%, with catering, entertainment-related and tourism-related sectors significantly affected by the pandemic. Looking ahead, the unemployment rate will largely depend on the pace of recovery from the fifth wave of the pandemic.
Source: Census and Statistics Department, HKSAR Government