On Thursday, the Hong Kong government revealed a HK$19.1 billion ($2.4 billion) package.
This is to support a slowing economy as mounting political protests and the protracted U.S.-China trade war weigh heavily on the Asian financial center.
At a news conference, the Financial Secretary, Paul Chan announced the package as anti-government protests shook Hong Kong for the third month.
He indicated that the government is anticipating prospects of lower 2019 GDP growth to 0%-1%, from the original 2%-3%.
The measures include subsidies for the underprivileged and business enterprises.
In October, the off-cycle support came ahead of the annual policy address and the budget, it is scheduled for early next year.
Chan claimed the intervention was not connected to political pressure from the protests.
He said, “it is prudent and reasonable to assume that the economic headwinds will continue to be very strong.”
The government will also offer a 90% guarantee for accepted loans to small and medium sized businesses.
This will create more construction jobs, and hand HK$2.3 billion of subsidies to 900,000 school students.
Up-To-Date Economic Forecasts to Be Released
Hong Kong will issue its latest economic forecasts along with second-quarter data on Friday.
Analysts supposed the April-June readings would not give a full picture of the sharp shock to businesses perceived in the last two months.
Ten weeks of increasingly violent conflicts between police and protestors dragged down the international business hub into its worst crisis.
This was since it has reverted from British to Chinese rule in 1997.
Meanwhile, tourists are calling off hotel bookings and retailers are predicting a sharp drop in sales.
The cancellations are adding to the pressure on local businesses due to the year-long trade war. China’s wider economic growth is also slowing down.
Last week, Hong Kong leader Carrie Lam warned the next recession will hit the city’s economy like a “tsunami.”
She also added, her administration will deliver more “daring measures” in supporting growth.
The East Asian head of global markets research at MUFG, Cliff Tan, indicated that Chan’s package is still questionable in easing the downward pressure on Hong Kong’s small and open economy.
Adding that China’s economy was also struggling, he added, “The world’s going into recession … Hong Kong will not be able to somehow ride that out without being affected.”
- Trading Instrument