According to Hong Kong’s financial chief announcement, the city’s economy is expected to increase by up to 5.5% this year, depending on the management of the COVID-19 pandemic.
Under the 2021-2021 budget presented by Financial Secretary Paul Chan, the Hong Kong government will launch HK$120 billion, which equals $1.5 billion, worth of measures to recover the local economy, which has been heavily hit by the disease.
Significantly, the measures will include spending vouchers of HK$5,000, nearly $650, for each resident and unemployment loans.
According to Chan, depending on the economic recovery progress, the financial city’s economy will likely increase between 3.5 to 5.5% in the second half of 2021, with a possible recovery of the global economy.
Furthermore, he announced the local economy will still meet some hurdles in the first half of 2021 as tourism recovers.
Hong Kong’s economy will grow at an average of 3.3% annually between 2022 to 2025
As we know, Hong Kong was among the first places to record coronavirus cases following the outbreak in Wuhan, China. They suffered large economic setbacks due to the epidemic. And this was following seven months of social unrest over an anti-government protest movement.
Hong Kong has handled to keep infections at a relatively low rate, with about 10,800 cases and 197 deaths. However, its economy dropped by 6.1% for the year 2020, the biggest decrease on record. Unemployment has also reached a 16-year high of 6.6%.
Financial Secretary believes the city’s economy will grow at an average of 3.3% annually between 2022 to 2025. Moreover, he says that it will also benefit from mainland China’s economic growth and global economic activities gravitating from the West to the East.
Due to new fiscal measures and continued growth in recurrent expenditure, the fiscal deficit will be around HK$100 billion. This will be for the following financial year, accounting for 3.6% of Gross Domestic Product. This indicates Hong Kong will record a deficit for many years after achieving a surplus for 15 years.