Financial News: Hong Kong Govt To Hand Out Consumption Vouchers,

Hong Kong Govt To Hand Out Consumption Vouchers, Cuts Tax

02/22/2023 - 06:09:00 (RTTNews)

(RTTNews) - Hong Kong Financial Secretary Paul Chan on Wednesday unveiled consumption vouchers, salaries tax cuts and a new scheme to attract talent as well as investment for the economic revival.

In the budget 2023-24, Chan said "I believe that Hong Kong's economy will visibly recover this year, and I remain positive." But the economic recovery is still in its initial stage, he added.

The city's economy is forecast to rebound this year with gross domestic product set to expand in the range of 3.5 percent to 5.5 percent. The economy shrank 3.5 percent in 2022.

Underlying inflation is seen rising to 2.5 percent and headline <a href=https://www.rttnews.com/3338337/hong-kong-inflation-rises-to-2.aspx target=_blank >inflation</a> to advance to 2.9 percent this year.

The government also announced a new round of consumption vouchers worth HK$5,000 to each eligible resident.

To alleviate the economic pressure, Chan proposed to reduce the salaries tax by 100 percent subject to a ceiling of HK$6,000. This will reduce the government revenue by HK$8.5 billion.

With a view to further enrich the talent pool as well as attract more new capital to the city-state, Chan plans to introduce a new Capital Investment Entrant Scheme. Applicants shall make investment at a certain amount in the local asset market, excluding property.

For supporting businesses, Chan proposed reducing profits tax by 100 percent with a ceiling of HK$6,000. He also lowered the stamp duty for first-time home buyers.

The government took a "moderately liberal" fiscal stance this year. "Hence, this is still a deficit budget," Chan said.

The government expects to register a deficit of HK$140 billion in 2022-23, which was bigger than the original estimate of about HK$56 billion. He forecast a deficit of about HK$54.4 billion for 2023-24.

The economy contracted 4.2 percent in the fourth quarter, following a decline of 4.6 percent in the third quarter. On a seasonally adjusted quarter-to-quarter basis, GDP remained virtually unchanged at the end of the year.

Following the reopening of Hong Kong's borders and end of virus-related restrictions, the economy is set to log robust growth this year, Capital Economics' economist Sheana Yue said.

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

China Industrial Profits Fall Sharply (01 hr(s), 07 min(s), 18 sec(s) ago)
(RTTNews) - The decline in China's industrial profits deepened in the first two months of 2023 ...Full Story»

Japan Leading Index Falls Less Than Estimated (01 hr(s), 15 min(s), 18 sec(s) ago)
(RTTNews) - Japan's leading index decreased slightly less than initially estimated in January, ...Full Story»

European Economic News Preview: Germany Ifo Business Confidence Data Due (01 hr(s), 50 min(s), 18 sec(s) ago)
(RTTNews) - Business confidence from Germany and monetary aggregates from the euro area are the to ...Full Story»

Japan Producer Prices Climb 1.8% On Year In February (31 min(s), 42 sec(s) ago)
(RTTNews) - Producer prices in Japan were up 1.8 percent on year in February, the Bank of Japan sa ...Full Story»

Japan Producer Price Data Due On Monday (14 min(s), 42 sec(s) ago)
(RTTNews) - Japan will on Monday release February figures for producer prices, highlighting a ligh ...Full Story»

Denmark Economic Sentiment Rises Further (59 min(s), 42 sec(s) ago)
(RTTNews) - Denmark's economic sentiment rose for a third month in a row in March, figures fro ...Full Story»

U.S. Durable Goods Orders Unexpectedly Slump As Aircraft Demand Extends Nosedive (31 min(s), 42 sec(s) ago)
(RTTNews) - Reflecting a continued slump in orders for transportation equipment, the Commerce Depa ...Full Story»

Spain Q4 GDP Growth Unrevised At 0.2% (26 min(s), 42 sec(s) ago)
(RTTNews) - Spain's economy expanded at a stable pace as initially estimated in the final quar ...Full Story»