The Fiscal Implications of Population Aging for Hong Kong SAR: Hong Kong Special Administrative Region

Author: Henry Hoyle

Hong Kong SAR’s significant demographic pressures will create fiscal challenges for the authorities.

Volume/Issue: Volume 2025 Issue 049

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Labor , Public Finance , Demography , Fiscal policy , Aging , Demographic change , Social safety nets , revenue-boosting tax reform , expenditure pressure , replacement rate , competitiveness vis , protection expenditure , Labor force participation , Social protection spending , Labor supply

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Summary

Hong Kong SAR’s significant demographic pressures will create fiscal challenges for the authorities. Fiscal expenditure pressures from population aging have already been rising rapidly for over a decade and are expected to increase significantly in coming years, even without factoring in the cost of needed improvements to the social security system. An aging population is also going to adversely affect the economy’s potential output growth and fiscal revenue, with the effect larger in a scenario where the working age population shrinks. Revenue-boosting tax reforms and other fiscal measures will be needed to provide a stable funding base for Hong Kong SAR’s high-quality development into the medium term.