Here is ten thousand HK dollars… Help kickstart our economy!

In an unprecedented move to help boost the ailing Hong Kong economy, the financial secretary Paul Chan has announced a HK$10,000 cash handout for all permanent residents aged 18 or above.

This creative fiscal policy measure will cost the Hong Kong government HK$71.1 billion (US$9 billion), and along with a number of other new spending plans on healthcare and loans for small businesses, will tip public spending for 2020/21 into a huge deficit of HK$139 billion.  

Whilst the deficit will not be sustainable in the long-run, Hong Kong policy makers see it as a necessary measure with their economy in tatters following violent anti-government protests, a trade-war with the US, and most recently the outbreak of the deadly coronavirus. The economy is now in recession with the last two quarters of 2019 recording negative year-on-year growth of -2.8% and -2.9% respectively.