An International Monetary Fund review has concluded that Hong Kong's economy is on a path to recovery and envisaged a real Gross Domestic Product growth of 2.7 percent in both 2024 and 2025.

An IMF staff mission visiting Hong Kong between Nov 11 and 22 last year reaffirmed in a report released on Friday Hong Kong's status as an international financial center and recognized that the special administrative region's financial system remained resilient, supported by robust institutional frameworks, ample room for policy buffers, and smooth functioning of the Linked Exchange Rate System (LERS).

The IMF projects that the fiscal deficit will narrow further, with the support of new revenue measures, the effects of expenditure control, and the winding down of pandemic-­related expenditure.

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IMF's endorsement comes at a time when Hong Kong is operating on a deficit pegged at HK$143.2 billion for the first eight months of the current fiscal year. The SAR has been in the red during the 2019 to 2023 fiscal years, with the exception of 2021.

In his Sunday blog, Financial Secretary Paul Chan Mo-po revised the predicted budget deficit for this fiscal year to below HK$100 billion ($12.8 billion), more than double the deficit of HK$48.1 billion forecast in his budget speech last February.

IMF found the direction and path of the HKSAR government's gradual medium-term fiscal consolidation appropriate. In particular, it recognized the HKSAR government's efforts in promoting the Guangdong-Hong Kong-Macao Greater Bay Area initiative, increasing investment, and attracting foreign talent and businesses in high-value industries to Hong Kong. It also found cancellation of all demand-side management measures for residential properties appropriate.

The financial secretary welcomed IMF's conclusions on Friday. "We will continue to reinforce and enhance Hong Kong's position as an international financial center, and give full play to our unique function of connecting with both the mainland and the world under the 'one country, two systems' arrangement."

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Chief Executive of the Hong Kong Monetary Authority Eddie Yue echoed Chan on Friday. "We will continue to stay vigilant and safeguard financial stability while enhancing Hong Kong's status as an international financial center,” he said.

During its November visit to the city, the IMF mission held discussions with HKSAR government officials, financial regulators and private sector representatives. The full report compiled by the mission will be discussed by the IMF Executive Board later in January.