Hong Kong budget- Financial Secretary Paul Chan with a positive tone gave his budget speech on Wednesday. Firstly, he discloses the measure to boost economic recovery after the COVID-19 pandemic and incentives to help businesses and residents.
Chan added the city is currently at an early stage of recovery because of its rigorous COVID measure policies. “I believe that Hong Kong’s economy will visibly recover this year, and I remain positive,” Chan said during his budget speech. “However, the economic recovery is still in its initial stage, and there is a need for our people and businesses to regain vigor.”
Chan said Hong Kong’s economy is expected to see a rebound of 3.5% to 5.5% in 2023, after shrinking 3.5% in 2022.
Firstly, the budget has been declared based on the global financial hub that reopened the China border. In addition, Hong Kong has as well followed China’s Covid policies until the middle of 2022 when the city is ready to lower down the restriction bar. In December, the Asian Financial center nearly dropped all its COVID restrictions.
“Domestically, the outbreak of the fifth wave of the epidemic early last year and tightened financial conditions weighed heavily on domestic demand,” said Chan on Wednesday.
“Nevertheless, with the local epidemic situation stabilizing, and the government’s counter-cyclical measures and disbursement of consumption vouchers making key impacts, employment conditions improved continuously.”
The budget handouts showcase some significant numbers that vary from segment to segment.
- Consumer vouchers worth HK $5000 ($637) per person to all adults this year. It is half of what the government has given in the previous budget in 2022 or HK $10,000.
- Chan has also announced measures to reduce salaries tax by 100%, capped at HK $6000. It is lower than the bar set in the previous year.
- Some economists have raised their voices based on the effectiveness of boosting economic recovery.
William Ga has spoken a few words on the situation, ‘ “I think the HK$5,000 … is not [what] everyone expected coming in. And second plus the HK$6,000 tax cut — all this combined, I believe [will] create a good momentum for the domestic consumption recovery in [the first and second quarter],” Ma, told CNBC’s “Street Signs Asia” on Wednesday.
In the second half of this year, Chan submitted a legislative proposal that stated to impose a 15% tax on multinational corporations with a global turnover of at least nearly $800 million from 2024-25.
Chan predicted that the cost pressure will be expected to increase alongside economic recovery and hence the inflation in 2023 will be at 2.9%.
It is showcasing that Hong Kong’s economy will see abundant opportunities in the near future.
The government estimated that Hong Kong will see a budget deficit of HK$139.80 billion for the financial year 2022-2023. That’s more than its original expectation of about HK$56 billion.
Fiscal reserves will likely fall to HK$817.3 billion by the end of the financial year ending March 31, Chan said.
- Published By Team Hongkong Journalist