UNITED STATES (OBSERVATORY NEWS) — The Hong Kong government has decided to allocate 120 billion Hong Kong dollars (15.4 billion US dollars) to support the economy, which was weakened by protests and the outbreak of coronavirus. It is reported by CNBC.
Planned spending will lead to a “record high” budget deficit of 139.1 billion Hong Kong dollars, or about 4.8% of GDP, said Hong Kong Finance Minister Paul Chan.
He outlined measures to help businesses, workers and households overcome the economic consequences of an outbreak.
These measures include the provision of loans at a low interest rate for small and medium-sized enterprises with a 100% guarantee of the government, as well as a 100% reduction in income tax rates up to 20 thousand Hong Kong dollars inclusive.
In addition, authorities announced cash payments of 10,000 Hong Kong dollars to permanent residents of Hong Kong aged 18 years and older.
However, the finance minister warned that “one-time relief measures” might have to be “phased out” in the coming years as government spending is rising.
Hong Kong’s economy shrank in 2019 for the first time since 2009 amid anti-government protests in the city and a trade conflict between the United States and China. The GDP of the Asian financial center fell by 1.2% last year.
In the IV quarter, the city’s GDP fell 2.9% in annual terms.
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