HONG KONG (Xinhua): Hong Kong is likely to see its highest ever budget deficit in the next fiscal year as it deals with the impact of the outbreak of novel coronavirus pneumonia as well as the social unrest in the past months, the city's financial chief said on Sunday (Feb 16).
In addition to the coronavirus outbreak, the local community has yet to fully recover from last year's social events. As a result, it is necessary to remain cautious on the short-term economic outlook and fiscal deficit is likely to remain for a period of time, Financial Secretary Paul Chan said in an article published on his official blog.
The projected fiscal deficit for the 2020-2021 fiscal year is likely to be the highest ever, not only because of the government's recent countercyclical relief measures, but also due to the continued remarkable increase in recurrent spending over the past decade and the significant reduction in government revenues from taxes and land as a result of weakening economy, he said.
Chief Executive Carrie Lam announced on Friday a package of relief measures for businesses and residents suffering from the outbreak and a proposal for allocating HK$25 billion (US$3.22 billion) for the fight against the epidemic.
Chan emphasised that the HK government's current financial reserves allow it to introduce the countercyclical measures to stabilise employment and support the economy.
However, in order to ensure the stability of public finance, the government will pay more attention to financial sustainability in the future when considering new expenditures, especially recurrent expenditures, he said. - Xinhua
Did you find this article insightful?