'Slow Recovery Could Drain HK Reserves In 10 Years'

An emeritus economics professor at the University of Science and Technology Francis Lui has warned that Hong Kong could exhaust all its reserves in ten years if any economic recovery is slow.

Speaking on an RTHK programme on Saturday, Lui said government reserves had been poised to shrink even before the coronavirus pandemic due to the ageing population.

The government is expected to record a HK$276.6 billion deficit in the next financial year after rolling out a series of relief measures that come with a price tag of HK$287.5 billion.

Reserves are expected to drop to between HK$800 billion and HK$900 billion because of the stimulus package, though officials stress the city’s public finance remains healthy.

While Lui said he is not against the government's use of its coffers to aid businesses and people, the government should follow the principle of keeping expenditure within the limits of revenues enshrined in the Basic Law after the measures are implemented.

He also said if the economic recovery did slow down, then the government would have to start borrowing.