Financial Secretary Paul Chan Mo-poChan Mo-po speaks at the Lunar New Year Market Open Celebration Ceremony, January 26, 2023, at the Lunar New Year Market Open Celebration Ceremony. Financial Secretary Paul Chan Mo-poChan Mo-po said that the Hong Kong Special Administrative Region government will dial down its expansion fiscal policy this year ahead of the city's projected economic recovery.
He said that the city's fiscal policies will shift from being quite loose to fairly balanced in the 2023 -- 24 budget to be delivered next month.
The administration has seen less revenue from taxes and other government charges due to the COVID- 19 outbreak, while various anti-pandemic programs cost it more than HK $600 billion $76.66 billion over the past three years.
In the 2020 -- 21 financial year, all these factors have resulted in a fiscal deficit of more than HK $200 billion, and the deficit for 2022 -- 23 is expected to surpass HK $100 billion, Chan said.
The finance chief said that the enlarged budgets that have gone on for years have resulted in a drop in financial reserves to around HK $800 billion, representing the administration's 12 month expenditure.
He noted that increased expenditure has strengthened financial support for residents and small and medium enterprises through counter-cyclical measures and has maintained public and market confidence.
This year s economic growth is bound to be better than last year s with the gradual easing of social-distancing curbs and the resumption of quarantine-free travel between the SAR and the Chinese mainland, Chan said.
He said it is necessary and unavoidable for us to adjust fiscal policies because of the huge fiscal deficit that is the biggest challenge for the upcoming budget. He warned that some relief measures that have been in place for years may need to be changed.
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However, the government will review policies on how to help SMEs and vulnerable groups in need.
The pace and intensity of the economic recovery is important, especially when market confidence is relatively weak at the beginning of the economic revival, Chan said.
He said that it is not appropriate to eliminate all relief packages at one time, because the recovery in certain business sectors and residents' incomes could lag behind.