Hong Kong cutting 10 000 civil service jobs is it enough to turn its finances around

HONG KONG – Hong Kong’s government workers will bear the brunt of the biggest cuts in the finance chief’s bid to balance the books as the city braces itself for a fourth straight year of deficit.

Financial Secretary Paul Chan, in his Budget speech on Feb 26, announced that 10,000 civil service jobs would be axed by 2027.

That represents more than 5 per cent of Hong Kong’s more than 191,000 civil service posts. Civil servants account for some 4.6 per cent of the city’s 3.7 million-strong workforce.

All political appointees, lawmakers, civil servants and the judiciary will have their pay frozen for a year.

“The government will lead by example to demonstrate our commitment to cutting expenditure while ensuring the delivery of high-standard public services,” Mr Chan said.

The move, alongside other cost-cutting measures, is meant to help take Hong Kong out of the red by 2028. But Mr Chan’s Budget plan may not go quite far enough to turn the city’s financial situation around in just the next three years.

Hong Kong is expected to incur a fourth straight year of deficit amounting to HK$67 billion (S$11.5 billion) in the 2025/2026 fiscal year, which starts on April 1, the finance chief said.

The deficit for the current fiscal year will come up to HK$87.2 billion, much higher than his original estimate of HK$48 billion a year ago.

He has drastically underestimated the annual deficits in the past few years.

In the 2023/24 fiscal year, he estimated a HK$54.4 billion deficit, but the final figure came up to HK$101.6 billion. The year before that, he forecast a HK$56.3 billion deficit, less than half the final HK$122 billion.

Hong Kong’s gross domestic product is forecast to grow between 2 per cent and 3 per cent in 2025, buffeted by external