Hong Kong’s economic performance continues to be weak. Financial Secretary Paul Chan said yesterday that he maintains the forecast of a 3.2% annual economic contraction and estimates that there will be a deficit of up to 100 billion yuan in this fiscal year. He reiterated that the government must be prudent in financial management and live within its means. He also said that he is open to opinions on re-distributing consumer coupons, and hopes that as the epidemic is stabilized and controlled and the mainland economy continues to recover, Hong Kong’s economy is expected to gradually improve next year.
Chen Maobo said at the Financial Affairs Committee of the Legislative Council that Hong Kong’s economy has performed weakly this year due to the fifth wave of the local epidemic and the sharp deterioration of the external environment. The combined economic contraction in the first three quarters of this year was 3.3% year-on-year. Considering the economic figures in the first three quarters and the poor short-term outlook, the economy is expected to contract by 3.2% this year. He continued that it is expected that there will be a deficit of up to 100 billion yuan in this fiscal year, which is much higher than the 56.3 billion yuan estimated in the budget, and the fiscal reserve will further decline to the level of 800 billion yuan, which is equivalent to about 11 months of government expenditure. .
Chen Maobo also said that the continued recovery of the mainland economy will offset some of the negative impacts. For example, the interest rate hike cycle of advanced economies is roughly in line with market expectations, that is, it will end in the middle of next year, and the external economic situation may stabilize in the second half of the year. If the external environment is not worse than expected, and the local epidemic is stable and under control, he predicts that the economy will gradually regain momentum next year.
The new budget will be announced on February 22
Some members of the committee are concerned about whether the Hong Kong government will introduce a new round of consumer coupons or electricity subsidies. Chen Maobo said that some studies have pointed out that consumer coupons are quite effective in boosting the economy, but the plan involves a lot of public money, and he will pay close attention to market conditions before considering it, and he also said that he is open to various opinions.
As for some councilors urging the government to re-launch the “Employment Support” program, he pointed out that the current unemployment rate is relatively low, and many industries have reported that it is difficult to recruit people, so it may not be suitable for re-introduction at present. He also revealed that the new Budget will be released on February 22 next year, and more opinions will be heard during the consultation period.
Originally published on AM730 https://www.am730.com.hk/Local/Hong Kong is expected to experience a deficit of 100 billion this year-the redistribution of consumer coupons is open/351332?utm_source=yahoorss&utm_medium=referral