“When preparing for the new budget … we will try our best to introduce appropriate and balanced measures while fully taking into account the public financial situation, striving to maintain Hong Kong’s economic vitality while strengthening public confidence in the economy.”

Chan will unveil his latest budget on February 28. He last month warned that the deficit was expected to exceed HK$100 billion (US$12.7 billion), nearly twice as much as his estimate from last February.

The minister said two weeks ago he would review some public service charges that had not been adjusted for a long time and those based on a user-pays principle, the costs of which the government could not recoup, in a bid to boost revenue.

Simon Lee Siu-po, an economist and an honorary fellow at the Chinese University of Hong Kong’s Asia-Pacific Institute of Business, said authorities should review whether to raise some public service charges to fulfil the principle of keeping expenditure within the limits of revenue when drawing up the budget.

“The government’s financial philosophy appears to be somewhat disorganised,” Lee said. “For instance, university tuition fees have remained at HK$42,100 a year without any increase for at least two decades. Water fees have also remained unchanged for a considerable period.

“It is understandable to postpone price adjustments during economic downturns, but it is important to handle them appropriately and in a timely manner during prosperous times.”

Gary Ng Cheuk-yan, a senior economist with Natixis Corporate and Investment Bank, said the government would likely cut welfare benefits or subsidies to help stem the financial bleeding.

“The government will maintain certain support for residents while plugging the gap in public spending,” Ng said. “It is likely to see a downsized version of existing schemes, such as transport subsidies and revisions to public charges because any immediate big change in taxes seems unlikely for now.”

Authorities increased the monthly threshold of the public transport fare subsidy scheme last November. Commuters now get a subsidy of one-third of their monthly public transport expenses exceeding HK$400, with a cap of HK$400. The threshold previously was HK$200 with a cap of HK$500.

The minister on Sunday also touched on opportunities to attract and explore new markets that arose from the Davos event.

He said he had met a range of business leaders from “large multinational corporations to unicorn companies” and touted the city’s financial and professional services, as well as its innovation and technology sector.

“More importantly, we invited them to visit Hong Kong to learn first-hand the development opportunities in related industries and attract them to settle and invest,” he wrote.

Hong Kong business, not national security, tops Davos discussions: finance chief

Chan also spoke to foreign government officials and the leaders of international organisations, especially those from the Middle East region and belt and road countries.

The latter refers to countries taking part in Beijing’s push to link dozens of economies in Asia, Europe and Africa into a China-centred trade network.

Many representatives took the initiative to speak to Hong Kong’s delegation at Davos to gain a deeper understanding of developments and opportunities in mainland China and Hong Kong, he added.

Chan said many leaders agreed that China and the wider developing Asia region would be important sources of global economic growth in the future, and hoped to further explore the mainland by using Hong Kong as an international platform.

The minister added that his trip was also intended to “tell Hong Kong and China’s story”, as well as emphasise the country’s “overall long-term positive economic trend remained unchanged, and its national policy of opening up was unswerving”.

Hong Kong finance chief rules out capital gains tax for ‘foreseeable future’

But the global economy was currently “fragmented and more fragile” amid a complex geopolitical situation, he said.

Chan also cited that most business leaders at the forum had expressed a negative outlook concerning the global economy in the next two years, with middle- and low-income communities across the world expected to come under significant pressure.

“Many political and business leaders agreed the world should strive to return to a rules-based multilateral trading system with the World Trade Organization at its core,” he said.

The minister added that everyone should strengthen their communication, rebuild trust, as well as promote free trade and investment to spur faster economic recovery and achieve mutually beneficial developments.