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Hong Kong’s government announced a stimulus package worth more than $2 billion and said the economy will struggle to grow at all this year amid the ongoing political unrest.
Gross domestic product will expand by 0% to 1% this year, Financial Secretary Paul Chan said Thursday, revising down the previous forecast of 2% to 3%.
The latest outlook comes as anti-government protests in the city stretch to an 11th week, putting the squeeze on Hong Kong’s businesses and tourism. Gross domestic product contracted in the second quarter from the previous three months, leaving open the prospect of a technical recession.
Chan announced fiscal support measures, led by an increase in the amount of personal income that’s tax free, a measure estimated to cost HK$1.84 billion ($235 million) and benefit 1.4 million people. The total value of the new measures is HK$19.1 billion, Chan said.
Measures to benefit citizens:
- An extra payment to social security recipients
- A subsidy for kindergarten, primary and secondary students
- A month’s rent for lower income tenants of government housing
- A one-off electricity charge subsidy worth HK$2000
Measures to benefit companies include:
- Waiving 27 groups of fees and charges to benefit sectors including retail, catering and tourism
- Reduction of rental for short-term tenancies of government land
- A new loan guarantee product for smaller companies
- Support retraining for workers affected by downturn
Chan is sitting on a fiscal reserve of about HK$1.17 trillion, after recording a budget surplus of HK$68 billion for the 2018-2019 fiscal year, according to data from a June government information document.
The current surplus is less than half the HK$140 billion of in the previous year, and was projected to fall further to HK$16.8 billion for the coming year, Chan said in his budget speech in February.
Hong Kong’s government announced a cash handout of HK$6,000 to all permanent residents in 2011.
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