In the file photo dated Jul 1, 2021, a light show is staged at the Victoria Harbor in south China's Hong Kong. (PHOTO / XINHUA)
UBS upgraded its forecast for Hong Kong's GDP growth to 3.8 percent this year, citing the financial hub’s recent unveiling of multiple measures aimed at attracting capital and talent during the 2023-24 Budget announcement.
William Deng Weishen, a North Asia economist with UBS Global Research, said after taking the recent developments and growth support measures in the budget into account, “We revise up our 2023 GDP growth forecast to 3.8 percent from 3.2 percent while flagging upside risk to our forecast.”
Although the budget projects a fiscal deficit of HK$54 billion for the 2023-24 fiscal year, UBS anticipates that Hong Kong's economic growth rebound could result in a balanced budget in the medium term
Hong Kong Financial Secretary Paul Chan Mo-po projected Hong Kong's GDP growth to rebound to a range between 3.5 and 5 percent this year during his 2023-24 Budget delivery on Wednesday.
READ MORE: Budget addresses HK's short-term needs, long-term development
As part of its efforts to boost the economy, the government will provide eligible Hong Kong residents and new arrivals with electronic consumption vouchers worth HK$5,000 ($637), to be distributed in two installments. A UBS report estimates that the program will require fiscal expenditure of around HK$33 billion, equivalent to 1.2 percent of the city's GDP.
Although the budget projects a fiscal deficit of HK$54 billion for the 2023-24 fiscal year, UBS anticipates that Hong Kong's economic growth rebound could result in a balanced budget in the medium term.
The budget assigns allowances to support the hosting of international events in Hong Kong, which would be useful to attract visitor flow to enhance the cyclical rebound, the report said.
The budget also proposed downward modification to the basic property stamp duty for property transactions, reducing the financial burden on home buyers, especially for buyers of smaller units.
READ MORE: HK provides relief package as economy starts recovery
In addition, the budget includes several other initiatives aimed at supporting both near-term growth recovery and long-term growth potential, such as allocating funds to help the digital economy and Web 3.0 thrive.
tianyuanzhang@chinadailyhk.com