Selected Issues Papers

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

By Henry Hoyle

May 6, 2025

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Format: Chicago

Henry Hoyle. "The Fiscal Implications of Population Aging for Hong Kong SAR: Hong Kong Special Administrative Region", Selected Issues Papers 2025, 049 (2025), accessed May 19, 2025, https://doi.org/10.5089/9798229010344.018

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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.

Subject: Aging, Expenditure, Labor, Labor force participation, Labor supply, Population and demographics, Social protection spending

Keywords: Aging, Competitiveness vis, Demographic change, Expenditure pressure, Fiscal policy, Labor force participation, Labor supply, Protection expenditure, Replacement rate, Revenue-boosting tax reform, Social protection spending, Social safety nets

Publication Details

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