Hong Kong likely to post 1st budget deficit

HONG KONG: Hong Kong is likely to record its first budget deficit in 15 years, the city’s finance chief warned on Monday, as the business hub reels from the twin shocks of the trade war and seething democracy protests. Hong Kong is led by Carrie Lam.

In the latest grim assessment for the city, financial secretary Paul Chan told lawmakers that the economy was set to contract 1.3 per cent in 2019, hitting the city’s usually bulging coffers.

Chan blamed the 2019-2020 deficit on decreased tax revenues, a slowdown in land sales and recent economic sweeteners he unveiled in a bid to win over the public during a tumultuous year of unrest.

“At the end of the financial year, the SAR government will be in the red,” Chan said, using an abbreviation for the Hong Kong government.

“Hong Kong’s economy is now in extremely difficult times,” he added, as he called for political violence to cease.

The city has been battered by nearly six months of protests triggered by rising public anger over China’s rule and the police’s response to protests. Crowds are pushing for greater democratic freedoms and police accountability but the city’s pro-beijing leadership has refused any major political concessions.

The increasingly violent rallies have hammered the retail and tourism sectors, with mainland Chinese visitors abandoning the city in droves.

Figures released Monday showed retail sales fell by a record 24 per cent in October, the fourth consecutive month of double-digit declines.