The 2021-22 Budget of Hong Kong - 24 February 2021

 

Overcoming the epidemic, stimulating the economy
and building a liveable city

With the epidemic still lingering, Hong Kong's economy is yet to come out of recession. Through the introduction of counter-cyclical measures costing over HK$120 billion (about EUR 12.7 billion), the 2021-22 Budget announced by the Financial Secretary of the Hong Kong Special Administrative Region Government on 24 February 2020 aims at easing the financial burden on people and businesses while ensuring that essential public services as well as infrastructure development are maintained.  It is equally important to grasp the major directions and new trends of future development to strategically enhance policy steering, support measures and resources allocation in key areas.  This will not only bring new impetus to Hong Kong's industries, but also enable them to have a more dynamic, diverse and interactive development.  

Following are the relevant highlights -

Key initiatives to revive and stimulate the economy 
 
 
Financial Services
 
Innovation and Technology (I&T)
Digital Economy
Green Economy
Air Cargo

Tourism

Tax relief and other concessions -
 
 
Electronic Consumption Vouchers

Support Enterprises 

A HK$9.5 billion (about EUR 1 billion) package of financial relief measures – 

Support Employment
Facing the Challenge

Despite the fiscal deficit, government spending would not be reduced in areas related to people's livelihood, especially the three policy areas of education, social welfare and healthcare.  In 2021-22, the recurrent funding for these three policy areas amounts to HK$302.3 billion (about EUR 32 billion) in total, accounting for 58% of the Government's total estimated recurrent expenditure. 

To ensure that financial stability is maintained and enhance confidence in Hong Kong's fiscal strength, the 2021-22 Budget has also put forward effective measures to ensure prudence in public finance –

Reduce Expenditure
 

 

Increase Revenue


Economic Performance in 2020

GDP growth: - 6.1%
Headline inflation: 0.3%
Underlying inflation: 1.3%
Unemployment: 7% in November 2020 – January 2021 (the highest in close to 17 years)

Economic Forecast for 2021

GDP growth: 3.5% to 5.5%
Headline inflation: 1.6%
Underlying inflation: 1.0%

2020-21 Estimated Fiscal Deficit - HK$257.6 billion (about EUR 27.3 billion)

2021-22 Estimated Fiscal Deficit -  HK$101.6 billion (about EUR 10.8 billion), equivalent of about 3.6% of GDP, mainly due to counter-cyclical fiscal measures and continued increase in recurrent expenditure

Total fiscal reserves of HK$902.7 billion forecast (about EUR 95.7 billion) by 31 March 2021 – equivalent to 13 months of government expenditure.
 

For more details as well as other measures to build a liveable city, with particular focus on measures to develop quality living, strengthen the healthcare system, promote caring and inclusion, enhance housing supply, please visit the website on the 2021-22 Budget.
 
 

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