'Hong Kong set for first deficit budget in 15 years'

Finance Secretary Paul Chan says government expenditure has gone up with relief measures offered to various sectors. Photo: RTHK

The Financial Secretary Paul Chan said on Monday that Hong Kong may record a budget deficit this financial year – the first one in 15 years.



Reporting the city’s economic outlook to lawmakers at Legco’s financial affairs panel, the secretary said land sales and tax revenues have dropped, while public expenditure on relief measures has risen.



"In the original budget, ... we had expected a surplus fund. But because of the economic downturn, tax returns have dropped. And in the middle of the year, we had some remedial measures, so at the end of the financial year, the SAR government will be in the red," he said.



"This is a first in 15 years," said Chan



But the finance chief said the city's economic position remains sound. "We have accumulated a surplus over the years. So the SAR government is still in a healthy financial position," he said.



Chan said social unrest has dealt a blow to the economy and he hopes people can help put an end to violence.