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Hong Kong has stated it should think about legalising playing on basketball and introduced sweeping cuts to authorities jobs because the Chinese language territory grapples with a years-long funds gap pushed by a protracted property slowdown.
The Asian monetary hub is ready to document a deficit of greater than HK$87bn (US$11bn) for the yr ending in March, monetary secretary Paul Chan stated on Wednesday. That may mark Hong Kong’s third consecutive yr of shortfalls, its longest streak of deficits since 2004.
Hong Kong’s economy has been weighed down by slowing development in mainland China within the wake of the pandemic and rising tensions with the US, which have hit the town’s conventional development drivers, economists stated.
“The unstable worldwide geopolitical scenario, escalated commerce conflicts and elevated international rates of interest exerted [an] antagonistic impression on native financial actions and confidence,” Chan stated as he outlined Hong Kong’s funds for the approaching monetary yr.
Officers on Wednesday stated the federal government was contemplating legalising playing on basketball, which might generate an estimated HK$1.5bn-HK$2bn in annual tax income. Presently, betting is just permitted on horseracing and soccer.
Chan additionally unveiled plans to chop about 10,000 jobs from Hong Kong’s civil service — roughly 5 per cent of its headcount — over the following two years and impose a pay freeze.
Economists have stated Hong Kong’s low debt ranges and HK$600bn of fiscal reserves — equal to a few fifth of GDP — present a buffer in opposition to downturns. However they’ve additionally warned that new sources of income can be wanted to keep up the territory’s vaunted low-tax standing.
UBS and Natixis have forecast GDP development of simply 2 per cent this yr, down from 2.5 per cent final yr.
Land premium income — which builders pay the federal government for land use — is anticipated to drop to HK$13.5bn for the yr ending in March, lower than half of the federal government’s preliminary forecast. Different property-related income sources, together with stamp duties from actual property transactions, additionally fell.
In an effort to encourage property transactions, Chan stated stamp duties on house purchases valued at HK$4mn and beneath can be set at simply HK$100, down from as a lot as 1.5 per cent of the deal worth.
The federal government additionally introduced a halt to business land plot gross sales for the approaching yr amid excessive emptiness charges, in addition to a HK$1bn analysis and growth institute for synthetic intelligence and a brand new channel to fast-track listings of Chinese language know-how and biotech corporations.
The town’s benchmark Dangle Seng index rose greater than 3 per cent on Wednesday.
“Regularly, we anticipate Hong Kong’s potential development to be decrease than prior to now,” stated Gary Ng, a senior economist at Natixis. “Prior to now, Hong Kong’s development was based mostly on the commerce circulation between the US and China. Proper now, these two drivers are mainly gone.”
Knowledge visualisation by Haohsiang Ko in Hong Kong
