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:
