Hong Kong to Spend $15.4B for Economy 02/24 06:14

Hong Kong to Spend $15.4B for Economy  02/24 06:14


   HONG KONG (AP) -- Hong Kong will introduce 120 billion Hong Kong dollars 
($15.4 billion) in fiscal measures to help businesses and residents impacted by 
the coronavirus pandemic, as it looks towards economic growth later this year 
following a recession in 2020.

   The measures --- which include tax relief, loans for the unemployed and 
consumption vouchers --- are aimed at stabilizing the economy, Hong Kong 
Finance Minister Paul Chan said in a budget speech Wednesday. He forecast the 
economy is set to grow 3.5% to 5.5% this year, compared to the economic 
contraction of 6.1% in 2020.

   The budget for 2021 "aims to alleviate the hardship and pressure caused by 
the economic downturn and the epidemic," Chan said.

   Unemployed residents can get loans capped at 80,000 Hong Kong dollars 
($10,300) in a program that postpones payments for the first year and charges 
1% interest. The measures come after Hong Kong last week reported a 7% jobless 
rate between November and January, the highest since April 2004.

   Vouchers worth 5,000 Hong Kong dollars ($645) will also be issued in 
installments to residents to boost consumption. Businesses and individuals will 
also receive tax relief.

   Chan said that Hong Kong's fiscal deficit is at a record high, after the 
government last year spent 300 billion Hong Kong dollars ($38.7 billion) on 
supporting measures, including a cash handout to residents, tax breaks and wage 
subsidies for businesses.

   To help replenish tax coffers drained by the extra spending and weak 
economy, the government will raise the stamp tax on stock trading to 0.13% from 
0.1% as of Aug. 1, Chan said.

   That caused shares in the company operating the local bourse, Hong Kong 
Exchanges & Clearing Ltd., to fall as much as 12.4% on Wednesday. The benchmark 
Hang Seng index fell 3%, to 29,718.24.

   Chan said Hong Kong, a semi-autonomous Chinese territory, would benefit from 
mainland China's "fundamentally sound" economy, despite uncertainties from the 
epidemic and in US-China relations.

   "In the medium term, Hong Kong will continue to benefit from the ongoing 
development of the mainland and the shift in global economic gravity from West 
to East," Chan said.

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