Hong Kong Unveils 2026-27 Budget Focused on Innovation and Growth

Hong Kong’s Financial Secretary, Mr Paul Chan, unveiled the 2026-27 Budget on February 25, outlining a comprehensive strategy to foster high-quality and inclusive economic growth through innovation, industrialisation, and financial reforms. The Budget coincides with the start of the National 15th Five-Year Plan and emphasizes Hong Kong’s strategic role as a global business and innovation hub.

Mr Chan highlighted that Hong Kong’s close connectivity with the Mainland and the world, combined with its large talent pool, positions the city to explore new markets and strengthen its economic competitiveness.

Innovation and Technology Development

The Budget introduces multiple measures to promote innovation and technology, including the establishment of the Committee on AI+ and Industry Development Strategy, the Sandy Ridge data facility cluster project, and programs to accelerate AI training and government digital transformation. Hong Kong plans to industrialize AI applications across sectors, encouraging widespread adoption.

Additionally, the International Clinical Trial Academy will be established to support the globalisation of Mainland biomedicine technologies, attract foreign investment, and develop Hong Kong into an international health and medical innovation hub.

Industrialisation and Infrastructure

Resources will be allocated to create the first national manufacturing innovation centre outside the Mainland. The New Industrialisation Elite Enterprises Nurturing Scheme will support emerging industries, while infrastructure initiatives such as the Hetao Shenzhen-Hong Kong Science and Technology Innovation Co-operation Zone and San Tin Technopole will promote technological and industrial integration.

Financial Reforms and Tourism

On the financial front, the Government aims to align with national strategies, enhance the internationalisation of the Renminbi, and reform the securities market. Legislation this year will improve tax regimes for family offices and funds, and establish licensing for digital asset service providers.

To boost tourism and rural development, a Northern Metropolis Urban-rural Integration Fund will pilot rural tourism projects, supporting the "tourism is everywhere" initiative.

Land Supply and Public Finances

Mr Chan noted that land sales will be carefully managed, with quarterly announcements based on market conditions. No general commercial sites will be sold in the upcoming year due to the current non-residential property vacancy rate.

Public finances have improved thanks to increased tax revenue, a booming economy, and the fiscal consolidation programme. The Operating Account is expected to return to surplus ahead of schedule, while the Consolidated Account will remain broadly balanced.

Support for Citizens

To alleviate economic pressures, the Budget proposes increases in the basic allowance, single parent allowance, married person’s allowance, child allowance, dependent parent/grandparent allowance, and the deduction ceiling for elderly residential care expenses for the 2026/27 assessment year.

Mr Chan concluded that while the global economic environment remains volatile, Hong Kong continues to advance through innovation and transformation. Leveraging its strengths and national support, the city aims to sustain economic development, improve quality of life, and expand opportunities for its people.