Financial Secretary John Tsang forecasts Hong Kong’s economy to grow 1% to 2% this year, lower than that of last year.
In his Budget today, Mr Tsang noted that the overall economic growth last year was 2.4%, the fourth consecutive year Hong Kong’s economic growth was lower than the annual average of 3.4% over the past decade.
The headline inflation rate in 2015 was 3% and the underlying inflation rate was 2.5%, after netting out the effects of the Government's one-off measures.
Noting lower economic growth and the adjustment in the property market will reduce rental pressure, Mr Tsang predicted the headline inflation rate for 2016 will be 2.3%, with the underlying inflation rate at 2%.
He said the local economy is laden with risks in the year ahead. To prepare for the potential adversity, the Government will provide small-and-medium enterprises with support measures to stabilise the employment market.
It will reduce profits tax for 2015-16 by 75%, subject to a ceiling of $20,000. Business registration fees will be waived, benefiting 1.3 million business operators.
To help SMEs tide over their liquidity needs, the application period of the special concessionary measures under the SME Financing Guarantee Scheme will be extended to next February.
To enhance the long-term competitiveness of SMEs, Mr Tsang will allocate $500 million for the three-year Pilot Technology Voucher Programme to subsidise their use of technological services and solutions to improve productivity and to upgrade business, providing a maximum subsidy of $200,000 for each eligible SME.
