HKMA to cut costs, freeze hiring as city battles deficit: report

[HONG KONG] Hong Kong’s de-facto central bank is planning to cut costs next year, according to a local news report, as the city takes steps to reduce its fiscal deficit.

The Hong Kong Monetary Authority (HKMA) plans to cut 5 per cent of its general operating costs in 2026 on the basis of this year’s budget, and will also make no new extra headcount, Hong Kong Economic Journal reported, citing unidentified sources.

“The HKMA has always adhered to strict fiscal discipline in formulating expenditure budgets and staffing arrangements, taking into account the needs of continuous operation and strategic development,” it said in response to a query from Bloomberg News.

The potential cuts would be in line with Hong Kong’s efforts to reverse a deep deficit in a weak economy. The government has pledged to shrink its workforce and freeze the pay of civil servants.

Financial Secretary Paul Chan has estimated the city’s operating account will return to a surplus from 2026 to 2027.

Other market regulators have made similar vows to rein in expenses. The Mandatory Provident Fund Schemes Authority cut 2 per cent of its total expenditure in 2024 to 2025, including a headcount freeze. It plans to make a further 2 per cent reduction in 2025 to 2026.

The Securities and Futures Commission initially proposed a 2.1 per cent salary hike for its staff in February.

Later, it froze the increase “given a challenging fiscal environment”, according to its latest annual report. BLOOMBERG