Fiscal Deficit · Full chronicle and history

The federal debt has officially surpassed the $40 trillion mark, with the federal deficit reaching $1.99 trillion for this fiscal year.

US national total debt officially crossed the $40 trillion mark on August 18, with the fiscal deficit and debt burden continuing to draw market attention.

In the first quarter of 2026, only 3 non-standard default events occurred among local government financing vehicles (LGFVs) nationwide, a significant drop compared to the same period in previous years. Analysis suggests this may be related to local governments defaulting on debts or the central bank increasing monetary financing of fiscal deficits.

U.S. Treasury Department data shows the federal deficit for the 2025 fiscal year is close to $1.8 trillion, and by April 2026, the White House Budget Office estimated the deficit for the 2026 fiscal year at $2.06 trillion.

Hong Kong's fiscal reserves fell from over 1.17 trillion in March 2019 to over 650 billion in March 2026, with deficits in 5 of the 6 fiscal years and a cumulative deficit of over 550 billion, dropping below the unwritten bottom line set by former Financial Secretary Antony Leung that reserves must be enough to sustain the government for 12 months with zero revenue.

Based on data from the International Monetary Fund, the video estimates that China's fiscal deficit in 2026 is expected to exceed 15%.

In 2026, the Shanghai Municipal Government's fund-based revenue budget is 226.14 billion yuan, a year-on-year decline of 25.6%.

In the first half of 2026, China saw an unprecedented year in which not a single province, municipality, or autonomous region had fiscal revenue capable of covering fiscal expenditure, with local finances in extreme distress.

The Hong Kong budget plans to issue 160 billion to 220 billion in bonds each year over the next five years, totalling 970 billion. Government debt as a share of GDP will rise from about 12% in early 2026 to 20%, and the debt-issuance ceiling will be raised for the third time to 900 billion.

On October 24, 2023, the Standing Committee of the National People's Congress approved the issuance of 1 trillion yuan in additional government bonds for post-disaster reconstruction and disaster prevention and mitigation; a subsequent audit report said that less than 32% of the funds could actually be accounted for.