Core Viewpoint - The Hong Kong government is implementing a salary freeze for all civil servants and political appointees in the 2025/2026 fiscal year to control government operating expenses amid a projected budget deficit of HKD 87.2 billion [1][5][6]. Economic Outlook - Hong Kong's economy is expected to grow by 2% to 3% in 2025, supported by stable employment, moderate inflation, and increased tourism [3][4]. - The government acknowledges challenges such as international geopolitical tensions affecting trade and investment sentiment, as well as high-interest rates impacting local asset prices [4]. Fiscal Measures - The government plans to reduce recurrent government expenditure by 7% by the 2027/2028 fiscal year, addressing the ongoing budget deficit [6][7]. - The total expenditure on civil servant salaries reached HKD 156.2 billion in the last fiscal year, marking a year-on-year increase of HKD 7.1 billion [7]. Housing Supply - The government aims to supply 190,000 public housing units over the next five years, with a long-term goal of 308,000 units in the next decade [10][9]. - The government will not sell commercial land in the upcoming year due to high vacancy rates and will consider converting some commercial land for residential use [11]. Technological Development - A budget of HKD 1 billion has been allocated to establish the Hong Kong Artificial Intelligence Research Institute, aimed at promoting AI research and application [12][13]. - The Northern Metropolis, including the Hong Kong section of the He Tao Cooperation Zone, is set to begin operations this year, with HKD 3.7 billion reserved for infrastructure development [15][16].