Financial Secretary delivers 2019-20 Budget on 27 February 2019

Budget to support enterprises, safeguard jobs, stabilise the economy and strengthen livelihoods in Hong Kong

 

      Hong Kong's Financial Secretary, Mr Paul Chan, presented his 2019-20 Budget to the Legislative Council on Wednesday 27 February 2019.  This is the second Budget of the current-term Government, which has been prepared against the backdrop of profound changes in the global political and economic landscape, a complicated and volatile external environment and heightened uncertainties.

 

      Mr Chan forecast a fiscal surplus of HK$58.7 billion (EUR 6.6 billion) for 2018-19, the fiscal reserves are expected to reach HK$1,162 billion (EUR 130 billion) by 31 March 2019.  On the premise of ensuring the stability of Hong Kong's public finances, the 2019-20 Budget adopts a forward-looking and strategic fiscal approach with the aim of nurturing industries, supporting enterprises, enhancing public services, improving people's livelihood and investing in the future.

 

      Total government revenue for 2019-20 is estimated to be HK$626.1 billion (EUR 70 billion), while overall expenditure is estimated to be HK$607.8 billion (EUR 68 billion).

 

Economic Performance in 2018

 

      The global economy expanded throughout 2018, with stronger growth momentum during the first half of the year.  The momentum was checked by brewing trade tensions and other unfavourable conditions in the second half of the year.  Affected by the external environment, Hong Kong's total exports of goods had an annual growth of 3.5% in real terms, but the growth in the fourth quarter decelerated, resulting in a slight year-on-year decrease of 0.2%.  Exports of services also moderated in the latter half of the year, though an overall growth of 4.9% was recorded for 2018.  GDP grew by 3% for the year as a whole, still higher than the trend growth rate of 2.8% over the past decade.  The labour market remained tight, with the unemployment rate remaining at 2.8%, the lowest level in more than 20 years.  Netting out the effects of the Government's one-off measures, the underlying inflation rate was 2.6%, up by 0.9% point from 2017.  Headline inflation for 2018 was 2.4%.

 

Economic Outlook for 2019

 

      Looking ahead for 2019, the global economy, beset with considerable uncertainties and downward pressures, has abruptly turned from synchronised robust growth early last year to the current synchronised slowdown.  Market sentiment has become increasingly cautious.  The uncertain global economic outlook this year will restrain Hong Kong's economic performance.  Having regard to the latest internal and external developments, Mr Chan will make optimal use of the fiscal surplus for 2018-19 to introduce one-off measures to support enterprises and relieve people's burden.  Together with the stimulus effect of other measures in the Budget, he forecast economic growth of 2% to 3% in real terms for Hong Kong in 2019.  He forecast headline inflation and underlying inflation of about 2.5% each in 2019, compared to 2.4% and 2.6% respectively in 2018.

 
Develop a Diversified Economy

 

      Mr Chan unveiled in his 2019-20 Budget a raft of initiatives to promote economic development and diversify Hong Kong's economy to enhance competitiveness and overcome challenges posed by changes in the external economy.  Key initiatives are recapped as follows -

 

Financial Services Industry

 

Innovation and Technology

 

 

Others

 

Support Enterprises and Alleviate People's Burden

 

 

Promote a Caring and High-quality Living Environment

 

Housing and Land

 

Healthcare

 

Caring Society

 


Liveable City

 

2019-20 Budget website 

 

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