By South China Morning Post | Created at 2024-12-29 01:45:32 | Updated at 2024-12-29 19:24:01
17 hours ago
Hong Kong has plodded through another challenging year with some hits and misses. On the downside, economic growth is forecast to slow to 2.5 per cent. Financial Secretary Paul Chan Mo-po also expects the fiscal deficit to exceed HK$100 billion (US$12.8 billion). His admission drove home the fact that the government has, for all the clawbacks from the Housing Authority’s reserve and bond issuance, been effectively running a deficit since 2019.
This raises the alarm that Hong Kong could be facing a structural deficit, with heightened risks of a credit rating downgrade and attacks on the Hong Kong dollar. All eyes are on Chan’s next budget to see if he would take decisive action to return Hong Kong to fiscal health.
The good news is the government has met many of the work targets it has set to “grab” talent and attract strategic enterprises. Chief Executive John Lee Ka-chiu recently revealed that the number of offices in Hong Kong with parent companies elsewhere had increased by 10 per cent this year. Meanwhile, 66 strategic enterprises have set up shop in Hong Kong or are expanding their presence here, half of which are industry leaders. Hong Kong now boasts over 2,700 family offices.
Thanks to the admission of over 100,000 professionals under its talent schemes, Hong Kong’s population is back above 7.5 million, where it was before the relaxation of the immigration schemes of several Western countries led to a substantial brain drain.
Hong Kong’s ranking in various international surveys has improved. Hong Kong beat Singapore to regain the third position in the latest edition of the Global Financial Centres Index. Its competitiveness and talent rankings have also risen. These improvements show the government’s efforts in reinvigorating the economy have not gone unrecognised.
The Hang Seng Index also recovered. It bounced back in September and has been hovering at the 20,000-21,000 level with heavier trading, generating much-needed revenue for the government from stamp duties on stock transactions.
