Hong Kong is planning to run a considerably lower budget deficit in the next fiscal year, on hopes the economy will recover from its longest ever recession.

This is according to Hong Kong’s Finance Secretary Paul Chan on Wednesday.

Recovery hopes are now focused on the coronavirus vaccine rollout.

The economy was plunged into recession before the pandemic, due to protests and U.S. – China trade tensions, Reuters reports.

The Finance Secretary stated he forecasts the budget deficit for the coming year to reach HK$101.6 billion, less than the all-time high of HK$257.6 billion expected for 2020/21.

The city was left with a much bigger deficit last year than the planned HK$139.1 billion, due to pandemic relief measures such as tax breaks for businesses and cash handouts for residents.
During his budget speech, Chan stated: “With the epidemic still lingering, our economy is yet to come out of recession. This year’s budget focuses on stabilising the economy and relieving people’s burden.”
Spending in the upcoming years to bolster consumer and business activity will include vouchers of HK$5,000 to residents, a reduction in the profits and salaries tax and a waiver on business registration fees.
Tourism and tech sectors will also receive support.
In terms of revenue, the government will hike the stamp duty for stock trading to 0.13% from 0.1%.
Furthermore, Hong Kong’s economy was forecast to grow by 3.5% to 5.5% this year, and run at an average growth rate of 3.3% annually from 2022 to 2025.
Last year, GDP declined 6.1%, the worst annual performance since 1962. 
Hong Kong’s Covid vaccine rollout is scheduled to get underway this week, having acquired 22.5 million doses of vaccines from Pfizer, Sinovac and AstraZeneca.