The Hong Kong government has announced 120 billion Hong Kong dollars ($15.4 billion) worth of measures to support its economy, which has been dragged down by pro-democracy protests and the new coronavirus outbreak.
That planned spending would result in “an all-time high” fiscal deficit of 139.1 billion Hong Kong dollars, or around 4.8% of gross domestic product, Hong Kong’s Financial Secretary Paul Chan said in his budget speech on Wednesday, CNBC reported.
The planned deficit for the coming financial year starting in April is much larger than the $37.8 billion fiscal shortfalls expected in the current financial year the Hong Kong government’s first deficit in 15 years.
According to CNBC, consumer and tourism spending has been weak spots in the Hong Kong economy. Some analysts said measures from the budget; particularly, the 10,000 Hong Kong dollars cash payout may not help the retail and tourism sectors much.
Janet Pau, director at The Economist Corporate Network, said the cash handouts could spur additional spending by Hong Kong residents. But that may not replace the loss of consumption due to a decline in mainland Chinese tourist arrivals, she told CNBC’s “Street Signs Asia.”
