“The pace of economic recovery may be slowing, but we are still seeing positive growth. We also have to think about the government's ability to finance these measures.”
Mr Chan said authorities had spent “huge sums of money” during the pandemic and the city's budget deficit had risen to around HK$100 billion in the current financial year, despite an initial estimate of around HK$50 billion. The total amount has increased to approximately US$12.8 billion. Land sales and stamp duty fell due to the weak asset market.
He added that the government will strive to increase utility rates, reduce expenditures and increase revenue, taking into account the economic situation of residents and the city's competitiveness.
Hong Kong's Treasurer exempts capital gains tax 'for the foreseeable future'
Hong Kong's Treasurer exempts capital gains tax 'for the foreseeable future'
However, the Treasury secretary said the domestic and global economies are expected to be more stable than last year, given that interest rates remain stable and are likely to fall later this year.
“Of course, there are still big variables, such as overseas geopolitics and the U.S. economic environment, but overall, regardless of asset markets or exports, interest rates are starting to fall and we expect them to remain relatively stable. '' he said.
However, with exports still facing pressure, the city will have to rely on local consumption and tourism in the short term, Chan added.
Hong Kong's finance chief warns that greater vigilance may be needed
Hong Kong's finance chief warns that greater vigilance may be needed
“Hong Kong is a service-based economy, so consumption will promote related services and employment,” he said.
“If the market is doing well, the consumption situation is good, everyone is doing business and making money, especially if the overall mood of society becomes more lively and happier as spending increases. This is an important area because it also improves investment” for us in the short term. ”
Mr Chan said the city needs to improve the quality of services and experiences for tourists to encourage tourists to return to Hong Kong and recommend Hong Kong as a destination for others to visit. Ta.
The finance chief said the number of tourists visiting the city in January reached 70% of pre-pandemic levels, and more tourists are expected to visit the city as air transport capacity increases. Stated.
However, the trend of residents crossing the border for leisure could affect the city's economic outlook.
The number of residents leaving Hong Kong on the first day of the Lunar New Year exceeded the number of tourists entering the city, according to the latest statistics from the Immigration Department.
On Saturday, 258,354 people entered Hong Kong, of which more than 128,000 were visitors, accounting for almost half of the total.
More than 332,000 people, or 77% of those who left the city, were residents.
Asked if the government would consider lifting measures to suppress the real estate market, Mr Chan said the measures would be introduced if there were “objective reasons”, adding that authorities would continue to monitor the situation.
Mr Chan also said the government will handle the real estate market with caution as many residents have invested most of their savings in their homes. He added that in the current state of the market, real estate could end up in negative equity if house prices fluctuate.
