Public Finance
220. As one may recall, the Government launched several rounds of large-scale counter-cyclical and anti-epidemic measures during the pandemic, resulting in a sharp increase of expenditure to a high level of $810.5 billion in 2022‑23. Although we have strived to reduce expenditure as the pandemic subsided, total expenditure for 2023‑24 still reached $727.9 billion, representing an increase of 36.9 per cent compared with 2018‑19, of which operating expenditure rose substantially by 40.2 per cent whereas operating revenue during the same period increased only by 13.1 per cent.
221. On capital works, the average annual expenditure has increased from about $76 billion over the past five years to about $85 billion in 2023‑24. This is mainly due to the Government's all‑out effort to press ahead with the land and housing supply projects, along with other infrastructure works for improving the environment and people's livelihood in recent years.
222. In face of challenges posed by the epidemic and external environment, our fiscal reserves have dropped to the current level of $733.2 billion. On Government's fiscal situation, we should not just focus on the short-term situation, but should look at the fiscal position over the entire economic cycle. The Government will uphold the principle of keeping the expenditure within the limits of revenues as enshrined under Article 107 of the Basic Law, and strive to achieve fiscal balance and avoid deficits, thereby ensuring the resilience and sustainability of our public finances.
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