Finance Secretary Paul Chan Mo-pau said consumer vouchers would boost the economy by 1.2% overall, but it is too early to say whether the program will continue next year.
Speaking on a radio show yesterday, Chan said that since the second set of vouchers were paid out on August 7, many people have spent more than the HK$2,000 payout.
He said the program is expected to boost the economy by 1.2 percent and without it, Hong Kong would experience negative economic growth this year.
“Last year, we gave everyone HK$5,000 consumption vouchers and each person spent HK$4,000 to 8,000 more on average. In other words, there is an effect multiplier,” Chan said.
The program has also helped small and medium-sized businesses and saved jobs, he said.
“Our latest forecast for economic growth is -0.5% to 0.5%. If not for the 1.2% boost, our economy will enter negative growth,” Chan said.
Chan said the program has encouraged the use of electronic payment, as more than seven million people and 130,000 merchants have used electronic payment platforms since August last year.
But he said Hong Kong could not rely on the voucher system alone to stimulate the economy.
“If the epidemic in general is under control, I think we are still cautiously optimistic for the economy in the second half of this year,” Chan said.
“The voucher system has effects, but we cannot rely on it alone and it is always important for Hong Kong to have travel with the international community as well as international investment,” he said. added.
Chan said the government should be careful with its finances, as this year’s voucher program cost more than HK$60 billion.
“The economy has not been very good – the same for the financial markets. For example, we have had less income from stamp duties and land sales. We expect a deficit this year of around 50 billion HK dollars. The lower income can lead to a bigger deficit,” he said.
Chan said other factors have also affected the economy – such as geopolitical issues and high inflation in the United States, as the supply chain has been hit by Covid-related lockdowns in mainland cities.
He said the government had no plan to reduce ‘tough measures’ for the property market as officials do not believe property prices will ‘fall off a cliff’ based on the data analysis they conducted.
“We wouldn’t change the overall direction and focus due to some short-term fluctuation,” Chan said.
“In the existing tough measures, the first is the buyer’s stamp duty, as foreigners should follow Hong Kongers when buying properties in Hong Kong because there is not enough supply for Hong Kongers.”
He also said people might have to pay more for their mortgages if the United States raises interest rates again next month.
In addition, Chan said, Hong Kong’s prime rate may also need to rise.