Adopting an expansionary fiscal stance, Hong Kong’s Financial Secretary Paul Chan announced a wide range of measures on February 26, 2020 to stimulate the economy and to tackle the current economic challenges by making optimal use of the fiscal reserves in his 2020-21 Budget.
Hong Kong’s economy contracted by 1.2% in 2019, and the full-year growth for 2020 is forecast to be between -1.5% and 0.5%. In the medium term, Hong Kong’s economy will grow by an average of 2.8% per annum in real terms from 2021 to 2024.
The sound fiscal reserves of about US$141 billion (HK$1,100 billion) allow the Government to implement counter-cyclical measures to help support enterprises and smoothen livelihoods. These measures include a one-time cash payout of US$1,282 (HKS10,000) to Hong Kong permanent residents, concessionary low-interest loan for small and medium enterprises and reductions in salaries and profits tax.