Hong Kong to lift its economy out of recession

Hong Kong to lift its economy out of recession

More than $15 billion budget to keep Hong Kong afloat

Governments around the world are trying to overcome the pandemic’s impact on economies by releasing stimulus packages. The latest actor to do so is the Hong Kong one.

More than $15.5 billion will be spent in the coming financial year to help a battered economy that’s been in recession for over two years. Hong Kong economy had reported six quarters of economic contraction. In 2020, the economy shrank 6.1%.

Since last year, the government tried to help business and households overcome the challenges posed by the COVID-19 pandemic by increasing spending, funded partially through its fiscal reserves. This move created a budget deficit of $33.2 billion for the current financial year.

The measures will be applied starting this April and include around $1.1 billion for purchasing and administering COVID-19 vaccines, about $1.2 billion for a reduction in profits tax and waiver of business registration fees. Moreover, each eligible resident will receive $645 consumption vouchers, along with a decrease in salaries tax and loan guarantees.

For the future, the city’s economy is expected to expand as much as 5.5% in 2021 and around 3.3% between 2022-2025.

The city’s index, HongKong45, traded more than 3% lower.

Sources: investing.com, cnbc.com

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