Hong Kong Announces Fresh Relief Measures to Boost Economy
Here are the measures were announced at a press conference Tuesday.
(Bloomberg) --
Hong Kong Financial Secretary Paul Chan unveiled a range of relief measures worth about HK$2 billion ($255 million) targeting tourism and the transportation industry in a renewed effort to help businesses grappling with the economic fallout of ongoing political turmoil.
The following measures were announced at a press conference Tuesday:
- Widening the scope of a 50% rent reduction announced in an earlier package to include some car parks, restaurants and shops in public properties, worth about HK$600 million
- A HK$16.5 million inspection subsidy for commercial vessels
- Support for travel agents
- A six-month fuel subsidy for taxis and some minibuses worth about HK$1.37 billion
- Hong Kong government is in talks with the travel industry over additional relief measures; local media had earlier reported potential air fare and hotel subsidies
Hong Kong’s economy has rapidly deteriorated this year in the face of ongoing anti-government protests in the streets and the U.S.-China trade war’s impact on exports. Advance third-quarter economic growth figures are set to be released Oct. 31, likely confirming a technical recession after a contraction in the second quarter.
Chief Executive Carrie Lam’s annual policy address last week focused on measures aimed at poorer citizens, including making it easier for first-time buyers to get mortgages on properties, increasing land supply, annual grants for students, as well as more subsidies for public transit.
An earlier stimulus package announced by Chan in August included benefits for both citizens and companies. More recently he’s called on property owners and developers to offer rent relief to struggling retailers, noting that about 100 restaurants have shut down because of the unrest, affecting about 2,000 employees.
Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, said in an emailed research report that the rounds of stimulus announced so far are “too small and too regressive” and would neither benefit the low-income population nor be strong enough to ease the deterioration in the local economy.
“Without a clear roadmap of how Hong Kong could navigate through the negative sentiment, the current measures taken by the government will not be enough for both cyclical and structural problems,” she said. “A larger, more progressive and targeted stimulus is needed.”
The latest economic indicators showed unemployment in the consumption and tourism related sectors climbed to the highest in more than two years for the July-to-September period, according to government data. Small business sentiment remains mired near a record low.
--With assistance from Natalie Lung.
To contact the reporters on this story: Eric Lam in Hong Kong at elam87@bloomberg.net;Kari Lindberg in Hong Kong at klindberg13@bloomberg.net
To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, Young-Sam Cho
©2019 Bloomberg L.P.