A person sporting a protecting face masks stands on Kowloon’s Tsim Sha Tsui waterfront that faces Victoria Harbour in Hong Kong.

Anthony Wallace | AFP | Getty Pictures

The Hong Kong authorities will spend greater than 120 billion Hong Kong {dollars} ($15.5 billion) within the coming monetary 12 months to raise its economic system, which has been in recession for 2 years.

“Hong Kong went by means of tribulations prior to now two years,” Hong Kong’s Monetary Secretary Paul Chan stated in his finances speech on Wednesday.

“With the epidemic nonetheless lingering, our economic system is but to come back out of recession,” he stated, in response to an official English translation of his Cantonese speech.

Hong Kong’s economic system has suffered six consecutive quarters of contractions after battling a number of crises, together with the U.S.-China commerce warfare that intensified in 2018, months of pro-democracy protests in 2019 and the continued pandemic.

Over the previous 12 months, the federal government has elevated spending to assist companies and households deal with challenges posed by the Covid-19 pandemic. However that has additionally introduced the fiscal finances to a file excessive, stated Chan.

For the approaching monetary 12 months beginning in April, Chan introduced measures that embrace the next:

  • Round 8.four billion Hong Kong {dollars} ($1.1 billion) for procurement and administration of Covid-19 vaccines.
  • About 9.5 billion Hong Kong {dollars} ($1.2 billion) price of measures to assist companies, together with a discount in earnings tax and waiver of enterprise registration charges.
  • For people, assist embrace a discount in salaries tax, mortgage ensures and consumption vouchers price 5,000 Hong Kong {dollars} ($645) for every eligible resident.

Financial outlook

Hong Kong’s economic system shrank 6.1% in 2020 — accelerating from the 1.2% contraction within the earlier 12 months, official knowledge confirmed.

Chan stated the town’s economic system will return to development this 12 months. He stated GDP is anticipated to increase by 3.5% to five.5% this 12 months, and a mean of three.3% yearly from 2022 to 2025.

However progress of the financial restoration this 12 months “will hinge on the event of the epidemic,” stated the monetary secretary.

“As cross-boundary motion of individuals and tourism actions take time to renew regular, the economic system will nonetheless face important challenges within the first half of the 12 months,” he stated in his finances speech.

Hong Kong began its Covid vaccination program this week. The federal government stated final week it has bought a complete of 22.5 million doses of Covid vaccine — “ample” for everybody within the metropolis.

With a inhabitants of round 7.5 million, Hong Kong has reported greater than 10,890 circumstances of the coronavirus and 197 deaths as of Tuesday, official knowledge confirmed.