Record HK$363b fiscal deficit forecast for HK

Hong Kong is estimated to book a record HK$363 billion fiscal deficit in this fiscal year, accountancy firm Ernst & Young, said.

This would be equivalent to 13.5 percent of last year's local gross domestic product, mainly due to the more than HK$300 billion coronavirus relief measures last year and a drop in revenue.

EY estimates that the fiscal reserves will drop to HK$797.3 billion by end-March, equivalent to 11.3 months of government expenditure, similar to the SARS period.

EY suggested the government launch one-off relief measures to support residences and enterprises. EY proposed issuing electronic shopping coupons of HK$5,000 for each residence to boost local consumption, involving HK$37.5 billion. This is expected to contribute 1.4 percentage points to economic growth.