Hong Kong Plans 10,000 Job Cuts and AI Investment to Tackle Deficit
Hong Kong is set to cut 10,000 civil service jobs by 2027 and invest heavily in AI to address its rising fiscal deficit.
Hong Kong is set to cut 10,000 civil service jobs by 2027 and invest heavily in AI to address its rising fiscal deficit. Financial Secretary Paul Chan announced the measures in the city’s annual budget, aiming for a “planned and progressive” path to financial stability.
The job cuts will reduce the civil service workforce by 2% annually over the next two years. Public sector salaries will also be frozen. Additionally, the government will implement a fiscal consolidation program to cut public spending by 7% by 2028. The deficit, driven by declining land sales revenue, has reached HK$87.2 billion—nearly double earlier estimates.
Alongside budget cuts, Hong Kong is ramping up AI investment, aligning with China's focus on technological self-reliance. The city has allocated HK$1 billion to establish an AI research institute.
Hong Kong's economy remains vulnerable to global challenges, including China-U.S. tensions and protectionist policies. The government has also halted commercial land sales due to high office vacancy rates, further impacting its revenue. With fiscal reserves now at HK$647.3 billion, the city is looking for long-term solutions to secure economic stability.
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