In an interview with Hong Kong Economic Journal, George Xu, Director, Asia-Pacific Sovereign Ratings at Fitch Ratings, said that Hong Kong's public finances are influenced by cyclical factors.

Even though some government's revenues are expected to recover moderately in the short term, its infrastructure-related expenditures has become more aggressive in recent years; coupled with the difficulty to reduce recurrent expenditures considerably, Xu expected that the government finances will continue to come under pressures.

According to the rating agency’s base case, the government's achievement of breakeven will be put off by at least 1-2 years behind the original official estimate of FY2027/28, meaning that Hong Kong may have to face fiscal deficits for at least another 4-5 years.

In addition, Xu assumed that the government's land sale revenue and stamp duty are expected to recover mildly, likely trimming the deficit slowly from a high level in the next few years. At this juncture, there is no need to worry that the fiscal reserves will "dry up", in his view.