Capital Works Reserve Fund

The Capital Works Reserve Fund is implicitly referenced through discussion of Hong Kong's Exchange Fund, a key source of funding for major infrastructure projects. Recent news focuses on the government's financial strategy regarding this fund. The fund is newsworthy because the government initially planned a rare transfer of HK$150 billion from the Exchange Fund to support large-scale projects like the Northern Metropolis. However, recent statements from Financial Secretary Paul Chan indicate that no further transfers from the Exchange Fund are planned for the next five years. This decision is based on a new medium-range forecast and a consolidated surplus achieved earlier than expected. The government anticipates a surplus for 2025-26 and 2026-27, driven by increased government revenues. This shift in strategy highlights the government's evolving financial priorities and its reliance on internal revenue generation rather than drawing from the Exchange Fund for capital works in the immediate future.