In recession- hit Hong Kong, government to give $1,200 cash to all permanent residents

WION Web Team New Delhi, Delhi, India Feb 26, 2020, 09.23 PM(IST)

File photo of Hong Kong protest. Photograph:( Reuters )

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The relief measures are largely comprised of one-off payments, including handouts of 10,000 Hong Kong dollars to residents aged over 18, tax breaks for firms, and other subsidies.

The Hong Kong government has announced the largest relief fund in a decade to ease the economic impact brought by last year's anti-government protests and the coronavirus outbreak.

This comes at a time when Hong Kong confirmed it has entered its first recession for a decade.

Hong Kong's financial secretary Paul Chan Mo-po unveiled a 120 billion Hong Kong dollar relief package in his budget speech, including the much-anticipated cash handout for all adult residents in the city, despite a record fiscal deficit.

The relief measures are largely comprised of one-off payments, including handouts of 10,000 Hong Kong dollars to residents aged over 18, tax breaks for firms, and other subsidies.

Also read: With surgery masks on, anti-govt protesters stage sit-ins amid coronavirus outbreak

Chan said the disbursement of ten thousand dollars is aimed at boosting local consumption and easing people’s financial burdens.

"After careful consideration, I have decided to disburse $10,000 to Hong Kong permanent residents aged 18 or above, to encourage and boost local consumption on the one hand, and relieving people's financial burden on the other. This measure, which involves an expenditure of about $71 billion, is expected to benefit about seven million people," Chan said.

"The social incidents in the past months and the novel coronavirus epidemic have dealt a heavy blow to Hong Kong's economy. In the face of an economic downturn, we expect a decline in government revenue in the coming year. The government must exercise fiscal prudence to ensure healthy public finance. That said, I believe that the government should also do a bit more, notwithstanding the fiscal deficit, when we are facing an economic setback and overwhelmed by a heavy atmosphere."

This year, Hong Kong’s economy will grow by 1.5 per cent to 0.5 per cent in real terms, while the headline inflation rate and the underlying inflation rate will ease to 1.7 per cent and 2.5 per cent respectively.

In 2019, tens of thousands of Hong Kongers held various rounds of anti-government and anti-China protests which initially began against the extradition bill but transformed into pro-democracy demonstrations. The protests led to the various incidents vandalism and in which it recorded a massive loss of public property and businesses.

The former British colony returned to Chinese rule in 1997 amid promises it would be granted a high degree of autonomy and eventual universal suffrage.

China's tightening grip on the city and Beijing's failure to live up to its promises have fed the unrest, in one of the biggest popular challenges to the ruling Communist Party since the return.