Five highlights from the 2020-21 Budget Address

Financial Secretary Paul Chan unveiled HK$120 billion in counter cyclical measures – double that of last year – in the 2020-21 Budget Address delivered on 26 February. It comes against the backdrop of a bleak growth forecast of -1.5% to 0.5% and an unprecedented HK$139 billion deficit for the 2020-21 financial year.

Watch the Financial Secretary's webinar explaining the initiatives

 

Among the package of sweeteners for businesses and individuals, we’ve pinpointed five major highlights:

  • HK$10,000 cash pay-out to all permanent residents (aged 18 or above)
  • Up-to HK$2 million low-interest loan available for SMEs with 100% guarantee by the Government
  • HK$700 million to the HKTB for tourism promotion once the epidemic is over
  • 100% reduction in profits tax for enterprises for 2019-20 (up to a ceiling of HK$20,000)
  • Waiver of business registration fees for 2020-21

For more information on the Budget, visit the official website:

2019 and 2020 numbers in a snapshot:

- Economic Performance in 2019 -

GDP growth: -1.2%
Headline inflation: 2.9%
Underlying inflation: 3.0%
Unemployment (latest): 3.4% - the highest in more than 3 years.

- Economic Forecast for 2020 -

GDP growth: -1.5 to 0.5%
Headline inflation: 1.7%
Underlying inflation: 2.5%

Useful links

Mazars: Hong Kong Budget Analysis 2020-21 Natixis: Hong Kong budget: throwing untargeted cash will not solve a well-defined problem KPMG: Commentary on the 2020-21 Budget PwC: Budget Address Commentary: A budget that promptly addresses a wide range of challenges