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Hong Kong has mentioned it is going to contemplate 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 about to document a deficit of greater than HK$87bn (US$11bn) for the yr ending in March, monetary secretary Paul Chan mentioned on Wednesday. That might mark Hong Kong’s third consecutive yr of shortfalls, its longest streak of deficits since 2004.
Hong Kong’s economic system has been weighed down by slowing progress in mainland China within the wake of the pandemic and rising tensions with the US, which have hit town’s conventional progress drivers, economists mentioned.
“The unstable international geopolitical situation, escalated trade conflicts and elevated global interest rates exerted [an] adverse impact on local economic activities and confidence,” Chan mentioned as he outlined Hong Kong’s funds for the approaching monetary yr.
Officers on Wednesday mentioned the federal government was contemplating legalising playing on basketball, which might generate an estimated HK$1.5bn-HK$2bn in annual tax income. At present, betting is simply 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 subsequent two years and impose a pay freeze.
Economists have mentioned 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 could be wanted to keep up the territory’s vaunted low-tax standing.
UBS and Natixis have forecast GDP progress 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 mentioned stamp duties on dwelling purchases valued at HK$4mn and beneath could 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 firms.
The town’s benchmark Cling Seng index rose greater than 3 per cent on Wednesday.
“Gradually, we expect Hong Kong’s potential growth to be lower than in the past,” mentioned Gary Ng, a senior economist at Natixis. “In the past, Hong Kong’s growth was based on the trade flow between the US and China. Right now, these two drivers are basically gone.”
Knowledge visualisation by Haohsiang Ko in Hong Kong
