Hong Kong budget deficit to increase next year, finance chief Paul Chan says, as government spending spree continues
- Chan says another year in the red is no cause for concern with the city supported by HK$1.1 trillion in reserves
- More financial pressure on the horizon with billions in new welfare spending taking effect in 2021
Hong Kong’s financial secretary has forecast an even bigger budget deficit for 2020-21 as he warned it could surpass the HK$80 billion (US$10 billion) projection for the previous year.
But Paul Chan Mo-po downplayed the significance of going into the red again, saying the city was backed by reserves of HK$1.1 trillion.
His prediction came after embattled city leader Carrie Lam Cheng Yuet-ngor rolled out a welfare package on Tuesday amounting to HK$10 billion of recurring expenditure, which will squeeze the government’s finances further from 2021.
In another spending announcement, commerce minister Edward Yau Tang-wah said on Sunday that small and medium enterprises would receive subsidies of up to HK$10,000 next month to take part in exhibitions held by the Hong Kong Trade Development Council. He predicted it could benefit 5,000 local companies.
Chan previously warned that government spending would exceed revenue in 2019-2020 for the first time in 15 years.