Financial Secretary delivers 2020-21 Budget - 26 March 2020

2019 was an unsettling year fraught with obstacles and an unforgettable one for all Hong Kong people. Early last year, Hong Kong had already foreseen that its economy would be subject to considerable uncertainties due to the US-China trade conflict and other external factors.  The unprecedented social incidents then broke out in the middle of the year.  Then there was an unexpected outbreak of the novel coronavirus disease.

The HK$120 billion (about EUR 14.13 billion) counter-cyclical measures proposed in the 2020-21 Budget represent an unequivocal commitment by the Hong Kong Special Administrative Region Government to rise to the challenge of overcoming adversity and helping people in need. These proposals also complement the initiatives set out under the recently established HK$30 billion (about EUR 3.53 billion) Anti-epidemic Fund.  The 2020-21 Budget also offers a wide range of measures to strengthen Hong Kong's pillar industries while identifying new growth engines among emerging sectors. Following are the relevant highlights -

Key initiatives to develop and diversify the economy

Financial Services

 

Innovation and Technology

 

In Addition

 

Tax relief and other concessions -

Cash Payout

 

Support for businesses and salary earners

 

 Economic Performance in 2019

GDP growth:                       -1.2%

Headline inflation:                2.9%

Underlying inflation:             3.0%

Unemployment (latest):       3.4% - the highest in more than 3 years.

 Economic Forecast for 2020

GDP growth:                      -1.5% to 0.5%

Headline inflation:               1.7%

Underlying inflation:             2.5%

2019-20 Estimated Fiscal Deficit - HK$37.8 billion (about EUR 4.45 billion), equivalent of about 1.3% of GDP

2020-21 Estimated Fiscal Deficit -  HK$139.1 billion (about EUR 16.38 billion), equivalent of about 4.8% of GDP.  However, almost HK$120 billion (about EUR 14.13 billion) of deficit related to the cash payment scheme and other one-off relief measures, which will not incur long-term financial commitments

Total fiscal reserves of HK$1,133.1 billion forecast (about EUR 133.42 billion) by 31 March 2020  – equivalent to 22 months of government expenditure

For more details as well as other measures to create a liveable city, with particular focus on measures targeting healthcare, environmental protection and housing, please visit the website on 2020-21 Budget

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