'HK risks huge debt as deficits, welfare bill mount'
A leading economist who advises the Chief Executive said on Sunday that the government must be prudent and get its finances under control or risk running up big debts in the future.  Speaking to reporters after a radio programme, Francis Lui, a former head of economics at the University of Science and Technology, said the administration would have to deal with rising welfare costs as Hong Kong's population ages.  Lui, an expert adviser to the Chief Executive's Policy Unit, said an expected budget deficit of more than HK$100 billion for this fiscal year, with another deficit expected next year, is not a good sign. "Usually, Hong Kong would have a large budget surplus. But, during the last several years, mainly due to Covid, Hong Kong has been suffering from a very big deficit, and that is not a very good sign," he said. "I hope the surpluses will come back again. Otherwise, in the very long run, Hong Kong may have to deal with a huge government debt." Lui's comments come after Financial Secretary Paul Chan warned last week that the government must control its spending amid pressure on the public purse. The minister said government expenditure had grown much faster than revenue in recent years, even excluding anti-pandemic measures. Accounting giant PriceWaterhouseCoopers predicted a final deficit of HK$110 billion this year, while rival Deloitte expects the figure to be more than HK$130 billion. The SAR's fiscal reserve stood at HK$834.8 billion in 2023, down from HK$1.1 trillion in 2018. Lui said he also expected sluggish economic growth for the territory in the next eight to 10 years, citing what he described as ongoing changes in the structure of the Hong Kong economy.  He added that a government forecast of 3.2 percent economic growth for this year is acceptable, as the SAR's economy is on track to recover in face of challenges from geopolitical tensions.