Cautious Budget Expected In Spite Of Covid

The Financial Secretary Paul Chan is set to deliver his much-anticipated budget, as the people of Hong Kong look for measures to help them through the pain of Covid and lift the economy. But the finance chief cautioned against expectations of a spending spree because of a drop in reserves.

Paul Chan says the SAR could post a record budget deficit of more than HK$300 billion this fiscal year.

That would be the second annual deficit in a row for Hong Kong, and a jump from the previous highest shortfall of about HK$63 billion in 2004.

Last year, the government spent more than HK$300 billion in Covid relief measures in the budget and through its anti-epidemic fund.

But businesses and workers continued to bleed, with the city's unemployment rate swelling to a near 17-year high of seven percent as social distancing due to Covid severely hampered economic activities.

Reports say the financial secretary could announce a scheme offering low-interest bank loans for those who lost their jobs to help them survive the pandemic, instead of a subsidy as called for by unionists.

Mr Chan may also be cutting spending... with the SAR's reserves expected to go down to about HK$800 billion at the end of this fiscal year.

It's been suggested that he could scrap the extra month of social security payments that's been a staple fixture of Hong Kong budgets in previous years.