Government Budget Surplus Put At HK$138 Billion

The government has posted a massive budget surplus of HK$138 billion, sending fiscal reserves to over HK$1 trillion.

During his budget speech on Wednesday, Financial Secretary Paul Chan said he plans to share 40 percent of the annual surplus with society and use the rest to improve services and invest in the future.

The massive budget surplus was driven by much higher-than-expected revenues from land premium and stamp duties. Overall revenue was more than HK$612 billion – 20.6 percent higher than the original estimate.

Chan said he is expecting a more buoyant economy this year, projecting the economy to grow between three and four percent – after it expanded 3.8 percent last year. He also said he thinks consumption and retail sales will perform well and push up costs. Thus headline inflation for this year will be slightly higher at 2.2 percent and underlying inflation at 2.5 percent, he said.

The secretary said he's aiming to develop Hong Kong into a more diversified economy and find a new growth driver. He said the government will inject HK$50 billion for supporting innovation and technology development and review regulatory and tax requirements to remove red tape.

But a shortage of land and manpower are hindering economic and social development. Chan said, so Hong Kong should consider increasing imported labour. He said the government will also enhance arrangements to attract overseas talent.