HONG KONG: Hong Kong’s economy grew by just 1.9 per cent in 2016 despite 3.1 per cent growth in the fourth quarter, Financial Secretary Paul Chan Mo-po said in his maiden budget on Wednesday.
Chan attributed the modest growth mainly to the impact of the grim global economic situation on Hong Kong’s trade performance, particularly in early 2016. The figure was near the upper end of the projection by his predecessor, John Tsang Chun-wah, whose forecast in last year’s budget speech was between 1 per cent and 2 per cent. Chan forecast that the economy would expand by 2 per cent to 3 per cent this year. He forecast a surplus of HK$92.8 billion for the 2016-17 fiscal year, compared to Tsang’s projection of HK$11 billion. The huge surplus was achieved largely on the back of higher-than-expected revenue from land sales and stamp duty, Chan said.
“Revenue from land sales is HK$50.8 billion, or 76 per cent higher than the original estimate, demonstrating yet again that land revenue has always been highly volatile and vulnerable to market fluctuations,” Chan said. “As a result of a period of hectic trading in the property market last year, stamp duty revenue for the whole year will be HK$8 billion, or 16 per cent higher than estimated,” he added. The former development minister became financial secretary last month after Tsang resigned to run for the post of chief executive. It was his maiden budget and also the last one under the administration of Leung Chun-ying, whose term will end in June.
