Published:
Revisions in budget proposals will turn surplus to deficit of $12bn
Revised budget proposals of giving $6,000 cash handouts and 75% salary tax rebates would mean a $40 billion stimulus package to consumption and growth.
According to Hang Seng Bank's Hong Kong Economic Monitor, the revisions would turn a small budget surplus of $3.9 billion to a deficit of over $12 billion for 2011/12 or abour 0.7% of 2010 nominal GDP.
The buoyant domestic demand is likely to continue to underpin growth in 2011 and the revised 2011/12 Budget measures are expansionary and is likely to boost overall demand. But price pressures from external and domestic sectors are likely to keep inflation at relatively high levels.
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