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Budget Address 2021: Deficit hits record high Forecasts economy return to growth this year

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰、Vikki Cai ChuchuEdited by: Zhu Zijin Cora 朱子槿
  • 2021-02-24

Hong Kong government's fiscal deficit would hit a record of HK$257.6 billion this financial year, Financial Secretary Paul Chan Mo-po said in his budget speech on Wednesday. The deficit was expected to narrow a bit to HK$101.6 billion in 2021/22, accounting for 3.6% of GDP as a series of supporting measures and the continued increase in recurrent expenditure.  Mr Chan also forecasted the city's economy would return to growth of between 3.5% to 5.5% this year, due to an expected recovery in the global economy and the effect of local stimulus measures. The Financial Secretary delivered his budget speech at a Legislative Council meeting today with a focus on “stabilising the economy and relieving people's burden”. He said the economy would still face significant challenges in the first half of the year, but "economic recovery will likely gain a stronger momentum in the second half of the year in tandem with an expected rebound in the global economy." However, he also said, “With the epidemic still lingering, our economy is yet to come out of recession.” “As the social distancing restrictions are relaxed and more people are vaccinated, confidence among investors and citizens will increase, and there will be corresponding economic activities to help the economy recover,” said Billy Mak, associate professor from the Department of Finance and Decision Sciences of Hong Kong Baptist University. “But the recovery process may take three or four years, and the economy this year will still be difficult.” Mr Chan also alerted that Hong Kong would record a deficit for a number of years after achieving a surplus for 15 years. Despite this, the government still decided not to cut spending that affects people's livelihood, especially resources for education, social welfare and healthcare, in order to protect people's livelihood and maintain public confidence. By …

Business

Hong Kong hotels struggle to stay afloat despite staycation fad

  • The Young Reporter
  • By: Zhu Zijin Cora 朱子槿Edited by: Zhu Zijin Cora 朱子槿
  • 2021-02-12

Chui Yuk-hei, a 26-year-old event planner, checked into several luxury hotels in November. She enjoyed her stay at the Mandarin Oriental, the Peninsula Hong Kong and the Four Seasons. “I never tried them before because these top hotels were super expensive,” Ms Chui said, “but now they all offer affordable overnight staycation packages. It’s the best time to enjoy their services.” She spent about HK$9,000 on three hotels in total, less than half the original prices.  More Hong Kongers like Ms Chui are going on staycations, spending holidays in hotels this year. But amid the coronavirus gloom, staycations are not enough to boost revenues, and local hotels still face uncertainties. The fourth wave of Covid-19 infections started in the city in late November 2020. Before that, clusters of cases linked to staycations prompted the government to limit the number of guests in each hotel room to four people only. “Health concerns made many customers cancel their staycation, “ said Benson Soo Koon-chau, 46, manager of four-star One-Eight-One Hotel & Serviced Residences in Sai Wan.      “Staycation is a very up-and-down business,” Mr Soo said. “Many hotels’ staycation business has been largely affected. It’s unlike long-staying service, which people need to pre-pay, no matter whether they eventually check in or not.” One-Eight-One Hotel has increased the portion of long-term leases for customers staying longer than two weeks to earn more stable revenue, he said. “I won’t go on staycation any time soon. It’s not safe. Even before the fourth wave, I would check the health measures at each hotel first,” Ms Chui said.  The pandemic has hit hard on the city’s hospitality industry which already suffered from anti-government protests in 2019. The occupancy rate slumped to 39% in the first six months of 2020 from the previous year’s 90% for …