HONG KONG (Reuters) – Hong Kong’s deficit for this fiscal year is expected to be just below HK$100 billion ($13 billion), the city’s finance chief said on Saturday.

The government is “focussing on cost-saving measures” to tackle the deficit, Paul Chan told residents on a programme on public broadcaster RTHK where he was gathering public feedback ahead of the upcoming budget.

“Although we need to move forward with public works projects… we have to prioritise developments according to their urgency,” he said.

The growth rate of economy in the first three quarters of 2024 was not as strong as expected due to high interest rates and external challenges, Chan said.

Hong Kong’s economy is expected to grow 2.5% in 2024, he wrote in a blog post in December. That followed a 1.8% third quarter growth rate, which fell below expectations.

The estimated deficit for the year ending in March is about double the previous forecast of HK$48.1 billion in the budget presented in February.

Chan attributed the deficit mainly to a sharp decline in land sales revenue. Boosting the economy amid a fiscal deficit would be Hong Kong’s “biggest challenge”, he said.

($1 = 7.7779 Hong Kong dollars)