HONG KONG, Dec. 2 (Xinhua) -- Hong Kong will likely register its first budget deficit in 15 years for the current fiscal year ending on March 31, as the economy has slipped into a technical recession amid prolonged social unrest, a senior official said here on Monday.
File photo: VCG
The forecast was made by Paul Chan, the financial secretary of China's Hong Kong Special Administrative Region (HKSAR) government at a meeting of the Legislative Council (LegCo).
The lackluster economy has led to declining tax revenue and land sales and the HKSAR government allocated funds to relieve the burden on businesses and individuals, Chan said when elaborating on the deficit in front of the members of the Panel on Financial Affairs of the HKSAR LegCo.
"Business sentiment has turned pessimistic, weighed down by external uncertainties and local violent incidents that have dragged on for months," Chan said.
The HKSAR government has cut its gross domestic product forecast for 2019 to a negative 1.3 percent, which will be the region's first annual decline since 2009. The Hong Kong economy dropped 2.9 percent in the third quarter, sharply from 0.4-percent growth in the second quarter.
Goods exports volume of Hong Kong fell about 10 percent year on year in October, and services exports went down 13.8 percent, marking the largest decline since the second quarter of 2003.
Retail sales decreased 24.3 percent from a year ago in October, the largest decline for a single month on record. The combined turnover of restaurants lost 13.6 percent year on year in the third quarter, the biggest since the second quarter of 2003. Visitors to Hong Kong tumbled 43.7 percent year on year in October.
"Those industries are struggling in bleak winter," Chan said.
The job market also suffered as the unemployment rate rose to 3.1 percent during the August-October period. The jobless rate in the catering sector even surged to a six-year high of 6.1 percent.
As violent incidents continued, Chan expressed concerns about looming challenges to the economy in the next year and even bigger impacts on people's livelihood, as well as the dented confidence of international investors.
"We need concerted efforts from all sectors of the community to stop violence and chaos and facilitate the economic recovery," Chan said. "So that order can be restored, residents can live a peaceful life again and businesses can operate normally."