Hong Kong’s finance chief will deliver his “most challenging” budget yet on Wednesday morning, analysts have said, pointing to the need for tempering wide-ranging expectations while cautioning the public against counting on quick fixes to the city’s economic woes.
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While the predicted deficit of nearly HK$100 billion (US$12.86 billion) has made headlines in recent weeks, the observers said on Tuesday all eyes should be on measures to balance the books over the coming years rather than expecting overnight solutions. The bigger task was to ensure the deficit did not become a structural problem, they indicated.
Financial Secretary Paul Chan Mo-po should focus on the bigger picture and boost public confidence in the economy for the medium and long-term, they added.
Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, described this year’s budget as Chan’s “most challenging” one.
“Policies should be about restoring the government’s financial health and the best way to do it would be to ensure Hong Kong’s growing momentum, so income tax [and other sources of revenue] would return,” he said.
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He cautioned it would take years to see the benefits of some measures such as a review of the civil service establishment.