Delivering his 2018-19 budget, the Financial Secretary, Paul Chan, announced a range of measures to diversify the economy, grasp regional and global opportunities and promote innovation and technology (I&T).
Mr. Chan revealed that Hong Kong’s economy expanded 3.8 percent in 2017 due to better-than-expected outturn in the external environment. He was cautiously optimistic about the city’s economic prospects in the near term, predicting GDP growth of between 3 and 4 percent for 2018.
Hong Kong Financial Secretary Paul Chan delivers the 2018-19 Budget in the Legislative Council on February 28.
|
Mr. Chan reported that the city posted a provisional budget surplus of $17.6 billion for the 2017-18 financial year.
Already in a state of full employment, the city’s labor market further tightened. The latest unemployment rate dropped to a 20-year low of 2.9 percent. The headline inflation rate for 2017 was 1.5 percent as inflationary pressure remained moderate.
With the surge of I&T and fierce competition between economies, Mr. Chan said that Hong Kong must enhance its I&T environment, attract companies from new economy sectors and research institutions and nurture talent for a knowledge-based economy.
The Financial Secretary set aside $6.4 billion to support Hong Kong’s I&T development in biotechnology, artificial intelligence, smart city and financial technologies. The funding illustrates a new fiscal policy which adopts forward-looking and strategic financial management principles in optimizing the use of surplus to invest and relieve people’s burdens. Funding targets include the Hong Kong-Shenzhen Innovation and Technology Park, the Innovation and Technology Fund to support applied research and development, research clusters on healthcare technologies and artificial intelligence and robotics, Science Park and Cyberport to enhance support for start-ups.
The government will inject additional funds to develop the creative industries. In addition, the government will continue to strengthen the city’s traditional industries particularly financial services, trading and logistics and construction.
To improve the environment and combat climate change, the Financial Secretary set aside $102 million to promote the installation of renewable energy facilities at government buildings, venues and community facilities. This is in addition to the allocation of $25 million last year.
The Financial Secretary also announced a raft of livelihood initiatives including reducing local tax burdens, enhancing elderly services and supporting the disadvantaged and the young.
Fiscal position
The 2017-18 revised estimate on government revenue is $78 billion. As for government expenditure, the Financial Secretary forecasts a revised estimate of $60 billion.
Overall expenditure for 2018-19 will increase 17.6 percent over the previous year to $71.3 billion.
Fiscal reserves are expected to reach $127 billion by end of March 2018.
2018-19 Budget |
