HONG KONG, Feb. 16 (Xinhua) -- Hong Kong is likely to see its highest ever budget deficit in the next fiscal year as it deals with the impact of the outbreak of novel coronavirus pneumonia (COVID-19) as well as the social unrest in the past months, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government said on Sunday.
In addition to the COVID-19 outbreak, the local community has yet to fully recover from last year's social events. As a result, the short-term economic outlook has to be cautious and fiscal deficit is likely to remain for a period of time, Financial Secretary Paul Chan said in an article published on his official blog.
The projected fiscal deficit for the 2020-2021 fiscal year is likely to be the highest ever, not only because of the government's recent counter-cyclical relief measures, but also due to the continued remarkable increase in recurrent spending over the past decade and the significant reduction in government revenues from taxes and land as a result of weakening economy, he said.
HKSAR Chief Executive Carrie Lam announced on Friday a package of relief measures for businesses and residents suffering from the COVID-19 outbreak and a proposal for allocating 25 billion Hong Kong dollars (3.22 billion U.S. dollars) for the fight against the epidemic.
Chan emphasized that the HKSAR government's current financial reserves allow it to introduce the counter-cyclical measures to stabilize employment and support the economy.
However, in order to ensure the stability of public finance, the HKSAR government will pay more attention to financial sustainability in the future when considering new expenditures, especially recurrent expenditures, he said.