Hong Kong Government EarMarks $ 128 Million for New AI Research Institute and AIMS to Cut Public Spending

Hong Kong’s Government has earmarked 1 billion hong kong dollars ($ 128.67 million) for the establishment of an artificial intelligence research institute.

Called the Hong Kong Ai Research and Development Institute, The Facility will “Spearhead and Support Hong Kong’s Innovative R & D as Well as Industrial Application of Ai,” The City’s Financial Secretary Paul Chan said in his budget speech wedding wedding.

Gary Ng, Senior Economist at Natixis, Sees Hong Kong’s Investment in Innovation and ai as a positive move.

“Hong Kong Hasn’T been so good in terms of innovation … Like, how to actually create a new product. But … The AI ​​Industry is evolving in quite a qi a quick pace. So for the case of hong kong, IF It is altar to adapt To this new environment, trying to use ai more, including what we see within the government, I think that is definitely a positive signal, “He Told CNBC’s”Street signs asia“on Wednsday.

Tech Stocks Rallied on the back of the announcing, with the hang Sen tech index gaining as much as 4.49%.

Among the top gainers in the session was food delivery company Meituan (UP 9.21%) and e-commerce platform Jd.com (8.26%).

Meanwhile, The Hang Seng Index Gained as much as 3.19%.

Chan attributed improved sentiment in asset markets this year in part to Central Government Measures to Support Hong Kong’s Capital Market, and the Us Rate Cut Cut Cycle.

“The stock market was increased in Both pris and turnover volume,” He said, adding that the hang seng index rose 18% for the year, while the average daily turns by 26%. Funds raised by new listings increase to hk $ 88 billion, he added.

Chan expects hong kong’s economy to grow at an average rate of 2.9% a year in real terms from 2026 to 2029 to 2029, and the underlying inflation rate to be 2.5% a year, on average.

But Natixis’ Ng Says That Economic Growth Forecast is “Too Optimistic.”

“In the short run, we still see this uncertain in the global interest rate environment. There are actually a lot of geopolitical tensions that can actually affect our Hong Kong Kong Kong Kong Kong Kong Flows. Other Concerns he outlined Include more Trade Restrictions from the united states and potential other countries.

Ng Estimates that the Hong Kong Economy will grow at 2% this year and over the long term.

That comes as the asian Financial Hub Saw a Steep Decline in Government Revenue from Land Sales in the Past Financial Year. Land sales have been a key source of income for the government and contributed to over 20% of coffeers, A Figure has now plunged to about 5%Reuters reported.

Natixis’ NG Expects the Government to Focus Strongly on Fiscal Consolidation by Restricting Expenses and Moderately Increasing Revenue.

“That will be a direction that we will continue to see, probally in the next few years, because hong kong’s fiscal deficit problem is incorporated structural,” He added.