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TOPLINE update on the city’s economic performance and fiscal outlook

Hong Kong’s 2023-24 Budget was released by Financial Secretary Paul Chan on February 22, 2023, with the theme "Leaping Forward Steadily, Together We Bolster Prosperity under Our New Vision".


Here is a TOPLINE update on the city’s economic performance and fiscal outlook. All figures are in Hong Kong dollars.


Economic Performance in 2022

  • GDP growth: -3.5%

  • Unemployment rate: 4.3%; underemployment rate: 2.3%

  • Headline inflation: 1.9%; underlying inflation 1.7%

Economic Prospects for 2023

  • GDP growth forecast: 3.5% to 5.5%

  • Headline inflation forecast: 2.9%; underlying inflation: 2.5%

Revenue and Expenditure

  • Total Government Revenue 2023-24: $642.4 billion

  • (Profits tax: $170b; Land premium: $85b; Stamp duties: $85b; Salaries tax: $83b; Investment income: $66.4b; Other revenue: $153b)

  • Total Government Expenditure 2023-24: $761 billion (Social welfare: $129b; Health: $124.8b; Education: $114.7b; Infrastructure: $88.7b; Economic: $70.5b; Security: $66b; Environment and Food: $46.6b; Others (including support, community and external affairs and housing): $120.7b)

  • Consolidated deficit forecast 2022-23: $139.8 billion

  • Forecast deficit 2023-24: $54.4 billion


Fiscal reserves forecast to be $817.3 billion by 31 March 2023


Initiatives

  • Impose annual special football betting duty of $2.4 billion on the Hong Kong Jockey Club for five years, starting from 2023-24

  • Expand Government Green Bond Programme to cover sustainable finance projects and set up an Infrastructure Bond Scheme to better manage the cash-flow needs of major infrastructure projects

  • Adhere to the fiscal discipline of keeping expenditure within the limits of revenue; bond issuance proceeds will not be used to fund recurrent expenditure

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In addition, the following is a snapshot of measures to ensure a speedy economic recovery, support for people and businesses, and open up new horizons for long-term development.


Reviving the Economy

  • Over $250 million to organise and promote major tourism events

  • About $300 million to stage more mega and MICE events

  • $50 million to step up promotion and branding of Hong Kong

  • New mechanism to facilitate companies domiciled overseas for re-domiciliation to Hong Kong

  • New Capital Investment Entrant Scheme to attract people to live and pursue development in Hong Kong after investing a certain amount in the local asset market (excluding property)

Electronic Consumption Vouchers

  • Issue $5,000 electronic consumption vouchers to each eligible Hong Kong permanent resident and new arrival aged 18 or above

  • To be disbursed in two amounts of $3,000 and $2,000, starting from April

  • $2,500 vouchers for eligible people who have come to work or study in HK through different admission schemes

Relieving People’s Hardship

  • Reduce salaries tax for the assessment year 2022/23 by 100%, subject to a $6,000 ceiling

  • Extend the Public Transport Fare Subsidy Scheme for six months (to Oct 2023)

  • Provide an extra half-month allowance of standard CSSA payments, Old Age Allowance, Old Age Living Allowance or Disability Allowance

  • $1,000 subsidy for each eligible residential electricity account

  • Increase basic child allowance and additional child allowance from $120,000 to $130,000 from the year of assessment 2023/24

Supporting Enterprises

  • Reduce profits tax for the assessment year 2022/23 by 100%, subject to a $6,000 ceiling

  • Rates concession for non-domestic properties for the first two quarters of 2023/24, subject to a ceiling of $1,000 per quarter

  • Additional funding of $550 million to the Hong Kong Trade Development Council to assist enterprises in opening up markets

  • Extend the application period of all guarantee products under the SME Financing Guarantee Scheme to March 2024

  • Offer fully guaranteed loans for eligible passenger transport operators and licensed travel agents from April 2023


Developing Industries


Innovation & Technology (I&T)

  • Conduct a feasibility study on the development of an Artificial Intelligence (AI Supercomputing Centre

  • $6 billion for universities and research institutes to set up thematic research centres related to life and health technology

  • $3 billion earmarked to enhance basic research in fields such as AI and quantum technology

  • $500 million to launch a Digital Transformation Support Pilot Programme targeting Small and Medium-Sized Enterprises (SMEs)

  • Establish a Microelectronics Research and Development Institute

  • Over $260 million reserved for Cyberport to nurture smart living start-ups

  • Inject $400 million into the Corporate Venture Fund and inject an additional $110 million to launch the Co-acceleration Programme

  • $50 million to expedite the development of the Web3 ecosystem

  • Introduce a “patent box” tax incentive to encourage the I&T sector to create more patented inventions

  • Organise an International GreenTech Week


Financial Services

  • Provide $100 million to attract more family offices to Hong Kong

  • Introduce a listing regime for advanced technology companies in Q1 2023

  • Put up specific recommendations on GEM for stakeholder consultation

  • Continue to explore with the Mainland the expansion of mutual market access and enhancement arrangements

  • Explore the use of Hong Kong’s Faster Payment System and Thailand’s PromptPay by visitors from the two places for local payment

  • Plan to issue no less than $50 billion of Silver Bond and $15 billion of retail green bonds in 2023-24

Aviation and Maritime

  • Enhance the aircraft leasing preferential tax regime

  • Increase to 450 the number of first-year training places of the GBA Youth Aviation Industry Internship Programme

  • $20 million reserved to expedite strategic studies and exchanges of the high-end maritime service industry

  • Inject $200 million into the Maritime and Aviation Training Fund

  • Expand the scale of Hong Kong Maritime Week


More details on the Budget website:


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