PwC Forecasts Govt Deficit Of HK$109bn

Accountancy firm PricewaterhouseCoopers (PwC) says it expects the SAR government to record a budget deficit of HK$109 billion this fiscal year, the second biggest deficit in a decade.

The government itself earlier forecast a deficit exceeding HK$100 billion.

Agnes Wong, a PwC Hong Kong Tax Partner, put the expected deficit down to a surge in government spending.

"[There will be an] expected increment in the expenditure, both the recurring and non-recurring expenditure of the government, including the expenditure on the social and medical [sector], education and infrastructure," she said.

However, Wong said the upcoming reopening of the border will provide a boost for the economy.

"This will help the flow of people, cash, funds, and also the business between Hong Kong and mainland China."

The accountancy firm said the government should introduce tax cuts and incentives to attract investment and talent to the city.

Wong also suggested that the public should be given more consumption vouchers, of between HK$3,000 and HK$5,000, to further stimulate the retail sector.