When undertaking long-term financial planning (for example, over 3 to 5 years), you must consider the impact of inflation; otherwise, your budget will soon become disconnected from reality. Inflation pushes up operating costs across the board, including staff salaries (employees will seek increases to offset the rising cost of living), rent (landlords may raise it on renewal), utility bills and the cost of some locally sourced materials. A simple and effective approach is to set a reasonable annual growth rate for operating expenses in your financial forecast for each future year, for example, by reference to Hong Kong’s average inflation rate over the past few years (usually around 2–3%), and increase the figures accordingly.
HONG KONG DRUG LICENSING
How should I account for the impact of ‘inflation’ on long-term operating costs in my financial planning?
A complete explanation of the regulatory basis, Drew Tang’s recommendations and risk alerts. The original material dates from 2025; read it alongside the latest official requirements.
Original guide, 2025 edition: These FAQs are provided for topic-based reference and have not all been individually checked against current rules. Please confirm fees, personnel, renewal, changes and product requirements against the professional in-depth guide for the relevant licence type and the official requirements in force at the time.
Back to Category F: Fees, Budget and Financial Planning (Q251-Q300) Search more questions