A woman wearing protective mask in Hong Kong.
Anthony Kwan l Getty Images
The Hong Kong government has announced 120 billion Hong Kong dollars ($15.4 billion) worth of measures to support its economy, which has been dragged down by pro-democracy protests and the new coronavirus outbreak.
That planned spending would result in “a record high deficit” for the coming financial year, Hong Kong’s Financial Secretary Paul Chan said in his budget speech on Wednesday.
“Since January 2020, Hong Kong has come under the threat posed by the novel coronavirus outbreak, which further dealt a blow to the economy. We must take decisive measures to tackle the situation,” he said.
Chan outlined measures to help businesses, workers and households weather additional economic challenges posed by the virus outbreak. They include:
- Low-interest loans for small- and medium-sized enterprises, with government guarantee
- A reduction in profits tax by 100%, subject to a ceiling to $20,000
- Cash payout of 10,000 Hong Kong dollars to permanent residents age 18 and above
The Hong Kong economy entered its first recession in a decade when it posted a 2.8% year-on-year decline in third-quarter gross domestic product. In the fourth quarter, the city’s GDP fell by 2.9%.
For the whole of 2019, Hong Kong’s economy contracted by 1.2% — the first annual GDP decline since 2009, said Chan.