As a result, fiscal reserves will fall to 30% of GDP by end-FY20, from 40% at end-FY19, and are likely to decline further over the medium term in the absence of off-setting tax measures. The total foreign currency reserve assets of US$432.8 billion represent about seven times the currency in circulation or 45% of Hong Kong dollar M3. … Our current fiscal reserves of about $1,100 billion enable us to roll out special measures amid the prevailing economic downturn, such as paying out cash. The deficits are mainly caused by the fact that government revenue cannot keep up with drastic increases in government expenditure, especially recurrent expenditure.  Since reunification, recurrent expenditure increased from $150 billion to $440 billion recorded last year.  It started to rise from $150 billion to $200 billion in the first decade after reunification, further increased to $300 billion over the following seven years (i.e. Sum Lok-kei worked at the Post from 2018 until 2020. The fiscal reserves stood at HK$1,120.8 billion as at December 31, 2019. Regarding 2020-21, taking into account the impact of the external economic environment and the epidemic, Hong Kong's economy is expected to be under contractionary pressure, with enterprises facing difficulties and the unemployment rate on the rise.  As such, this year's Budget focuses on "supporting enterprises, safeguarding jobs, stimulating the economy and relieving people's burden".  Measures for supporting the general public and enterprises, including the cash payout scheme, will be rolled out. The relief measures, which include the HKD10,000 cash pay-out to all Hong Kong permanent residents aged 18 or above, will substantially contribute to the government’s 2020-21 deficit, estimated at HKD139.1 billion, or 4.8 per cent of GDP. Although the deficit will hit an all-time high, a close look at its components shows that almost $120 billion of the deficit is related to the cash payout scheme and other one-off relief measures, which will not incur long-term financial commitments. * 2020/21 budget deficit expected at HK$257.6 billion. This level of fiscal reserves is equivalent to 11.3 months of government expenditure and is close to the level reached in 2003-04 when Hong Kong was hit by the SARS outbreak. in 2014-15) and to $400 billion after four years (i.e. “Given the epidemic’s catastrophic impact on Hong Kong’s economy, the Government has to dig deep into its fiscal reserves accumulated over the years to help our businesses and people. Of the HKD 139.1 billion (US$17.9 billion) allocated for the 2020-2021 budget, HKD120 billion (US$15.5 billion) has been designated for what is known as ‘relief measures’ for individuals. Foreign Exchange Reserves in Hong Kong averaged 224325.41 USD Million from 1993 until 2021, reaching an all time high of 495700 USD Million in February of 2021 and a record low of 38357 USD Million in June of 1993. in 2020-21), it will be almost $500 billion.  Such rapid growth is not sustainable. The 2020-21 Budget was announced by Financial Secretary of Hong Kong, Mr. Paul Chan on Wednesday, 26 February 2020. Foreign Exchange Reserves in Hong Kong decreased to 490600 USD Million in April from 491400 USD Million in March of 2021. CONSOLIDATED ACCOUNT (Note 1) Government revenue Hong Kong Budget Summary 2019-2020 ... robust fiscal reserves of HKD 1,161.6 billion by 31 March 2019. Hong Kong's fiscal reserves are expected to be 1,133.1 billion Hong Kong dollars by March 31, 2020, according to the budget. 172. Hong Kong is to announce plans for its largest budget deficit in at least a decade to cushion the shock of often-violent protests and the outbreak of a coronavirus on the recession-hit economy. Surplus/(Deficit) before issuance and repayment of government bonds and notes, Surplus/(Deficit) after issuance and repayment of government bonds and notes, Consolidated Surplus/(Deficit) after issuance and repayment of government bonds and notes, Fiscal Reserves at end of period (Note 5). To cope with the tough economic environment, this budget adopts an expansionary fiscal stance with optimal use of Hong Kong fiscal reserves to implement counter-cyclical measures summarised below: KEY FIGURES. After deducting all expenses and fees, the Accumulated Surplus of the Exchange Fund recorded an increase of HK$103.7 billion (Annexes 1 & 2). 168. Hong Kong’s fiscal reserves are expected to drop to HK$908.5 billion in 2019-2020, Chan says, from HK$1.1 trillion. 173. * Forecasts fiscal deficit of HK$101.6 billion ($13.10 billion)for next fiscal year, or 3.6% of GDP. A surplus of $58.7 billion is expected for 2018/19 and fiscal reserves to reach $1,162 billion by 31 March 2019. Following the special administrative region government’s launch of the second round of the Anti-epidemic Fund measures, the government’s budget deficit for fiscal year 2020-21 is expected to reach HK$276.6 billion (US$35.7 billion), accounting for 9.5 percent of Hong Kong… The Government must exercise fiscal prudence to ensure healthy public finance. Financial Secretary Paul Chan Mo-po on Wednesday rolled out his much-awaited 2020-21 Budget with a package of “counter-cyclical” measures worth a whopping HK$120 billion (US$15.4 billion) to help Hong Kong get back on its feet amid a recession brought about the triple blows from the global trade tensions, the 9-month-old social unrest and the coronavirus epidemic. In announcing the budget, Financial Secretary Paul Chan Mo-po said the focus will be on “supporting enterprises, safeguarding jobs, stimulating the economy and relieving people’s burden”. 169. Hong Kong is to announce plans for its largest budget deficit in at least a decade to cushion the shock of often-violent protests and the outbreak of a coronavirus on the recession-hit economy.. Fiscal Expenditure in Hong Kong decreased to 172001 HKD Million in the fourth quarter of 2020 from 230448 HKD Million in the third quarter of 2020. Hong Kong was ahead of the world when in February it announced a handout of almost $1,300 to residents suffering from an recession worsened by the … "In the coming years, government expenditure will enter a … CONSOLIDATED ACCOUNT (Note 1) The US-China trade conflict and the violent incidents in Hong Kong significantly dampened our economic momentum.  In the past six months, I have announced four rounds of relief measures costing over $30 billion.  These measures, together with the $30 billion Anti-epidemic Fund established in response to the recent novel coronavirus outbreak, resulted in a deficit of about $37.8 billion for 2019-20, which is about 1.3 per cent of GDP. 34. The revised estimates for the current financial year will be published along with the 2020-21 Budget on February 26, 2020. The decrease is mainly driven by additional relief measures and increased recurring expenditure, reduced tax revenue and land sales revenues. According to recent data released by the Financial Services and Treasury Bureau, the fiscal reserves held by the Hong Kong government stood at HK$1.12 trillion in February 2018. Article content. TABLE 1. 176. Financial Secretary of the Hong Kong Special Administrative Region, Mr. Paul Chan Mo-po, delivered the 2019/20 budget speech this morning. 175. Looking ahead, the government anticipates maintaining this solid position over the next five years. Hong Kong expects a record deficit of HK$139 billion for 2020-2021 that is mainly due to the one-off relief measures of around HK$120 billion. The Hong Kong Special Administrative Region (HKSAR) shall have independent finances, and shall ... GRA and the eight Funds constitutes Government’s fiscal reserves. in 2018-19).  For this year (i.e. 171. The following are highlights of Hong Kong's budget for the 2020/21 fiscal year starting in April. The fiscal reserve … Fiscal Expenditure in Hong Kong averaged 44140.38 HKD Million from 1976 until 2020, reaching an all time high of 230448 HKD Million in the third quarter of 2020 and a record low of 1407 HKD Million in the second quarter of 1976. * Forecasts fiscal reserves at HK$775.8 billion by end-March 2026, or 22% of GDP, equivalent to 12 months of government expenditure ($1 = 7.7542 Hong Kong dollars) TABLE 1. HONG KONG, Feb. 18, 2020 /PRNewswire/ — KPMG forecasts the Hong Kong SAR government will record a consolidated budget deficit of HKD47.7 billion for the fiscal year 2019/20, first deficit in 15 years. Detailed figures are shown in Tables 1 and 2. Detailed figures are shown in Tables 1 and 2. This level of budget deficit will reduce Hong Kong’s fiscal reserves to HK$797.3 billion as at 31 March 2021, amounting to 29.6% of Hong Kong’s estimated GDP in 2020. The Government announced today (January 31) its financial results for the nine months ended December 31, 2019. Details on the much-anticipated cash pay-out scheme are yet to be announced. in 2019-20) alone, recurrent expenditure shows a further increase of about $40 billion, and in the coming year (i.e. 170. Including unsettled foreign exchange contracts, the foreign currency reserve assets of Hong Kong at the end of August 2019 amounted to US$425.6 billion (end-July 2019: US$441.2 billion). Fees on placements by the Fiscal Reserves and placements by HKSAR government funds and statutory bodies were HK$32.6 billion and HK$11.5 billion respectively in 2020, with the rate of fee payment at 3.7% for 2020. 35. ESTIMATES for 2020-21 * Fiscal reserves are expected to be HK$1,133.1 billion by end March 2020 * Total government revenue for 2020-21 is estimated at … On the monetary side, the Hong Kong Monetary Authority has room to defend the HKD’s peg to the USD, with FX reserves … 174. In the face of an economic downturn, we expect a decline in government revenue in the coming year. It is worth noting that the Operating Account is projected to record a deficit for five consecutive years, as shown in the Medium Range Forecast.  In the four financial years starting from 2021-22, there will be an annual deficit of about $50 billion in the Operating Account, and the overall deficit in the Consolidated Account will range between $7.4 billion and $17 billion.  That said, the above forecast has not taken into account tax rebate and relief measures that the Government may implement. The budget allocates Hong Kong is fortunate to have a very strong fiscal position which allows the government Hong Kong’s government is drawing fresh criticism from economists and business advocates who say a third round of virus relief stimulus doesn’t go far enough. Though confident in Hong Kong's fundamental strengths and long-term prospects, I must prudently assess the impact of the current situation on government revenue in the coming year.  I thus forecast a decrease in tax and land revenues.  Taking also into account the launch of countercyclical fiscal measures on a much larger scale and the continued increase in recurrent expenditure as I have just mentioned, I expect that the fiscal deficit for next year will be $139.1 billion, accounting for 4.8 per cent of GDP. Such special measures and the ever-growing expenditure, however, will deplete our fiscal reserves. Besides, the revenue for the same financial year will include $19.5 billion from the issuance of green bonds and $22 billion brought back from the Housing Reserve.  Netting out the aforesaid revenue and one-off expenditure, the deficit is about $59 billion, accounting for 2 per cent of GDP. ... Fiscal reserves at the end of March 2020 stood at $1,160.3 billion. HONG KONG — The following are highlights of Hong Kong’s budget for the 2020/21 fiscal year starting in April. Our current fiscal reserves of about $1,100 billion enable us to roll out special measures amid the prevailing economic downturn, such as paying out cash.  Such special measures and the ever-growing expenditure, however, will deplete our fiscal reserves.  Take the 2020-21 financial year as an example.  Our reserves which are equivalent to 22 months of government expenditure at the beginning of the year will drop to a level equivalent to 16 months of government expenditure at year-end.  If we keep running a fiscal deficit, our reserves will eventually be used up.  This is something which we do not want to see.  Moreover, the Government will have to draw on the fiscal reserves to meet the funding already earmarked for a number of large-scale projects, for example the two 10-year Hospital Development Plans amounting to about $500 billion in total. The finance chief also forecasted a deficit for the next five years, with an estimated HK$139.1 billion for 2020-21, equivalent to be around 4.8 per … The social incidents in the past months and the novel coronavirus epidemic have dealt a heavy blow to Hong Kong's economy. The fiscal reserves stood at HK$976.6 billion as at July 31, 2020. The fiscal balance may have declined to -0.3% of GDP in 2019 after 2.3% in 2018, and we expect widening of the deficit in 2020, to -0.6% of GDP. However, the forecast of deficits over the next 5 years, ranging from HK$7 billion to HK$17 billion, means that a holistic review of Hong Kong taxation system is a top priority for the Hong Kong Government to attain Hong Kong’s fiscal health. Financial results for the nine months ended December 31, 2019, *************************************************************. 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