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Opinion | Hong Kong must return to fiscal prudence in 2024
- The city needs more than optimism and vibes to get through the challenges of a slowing economy, growing deficit and shrinking reserves
- The outlook requires cautious optimism and a heavy dose of reality, not lavish spending on fanciful projects
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Happy 2024! This is a time for new beginnings. The Hong Kong government certainly wanted to start things off with a big bang – with the largest and longest New Year’s Eve fireworks in Victoria Harbour, after an extended blackout because of years of social unrest and Covid-19.
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The outsize pyrotechnic show, themed “New Year, New Legend”, was meant to remind the people of Hong Kong of our optimism and diligence, and showcase “boundless vitality and innovation”.
And we certainly do need a little pick-me-up. The Christmas holiday was disappointing in terms of lights that adorn the skyscrapers lining both sides of Victoria Harbour, as well as the drop in restaurant and catering sector business and the 20-year box-office low for cinemas, thanks to the record number of outbound travellers.
The bad news of 2023 doesn’t end there, though. There was the property market slump, the Hang Seng Index in the doldrums and, of course, the more than HK$100 billion (US$12.8 billion) deficit about which Financial Secretary Paul Chan Mo-po has repeatedly warned.
That is almost twice as much as the original forecast from the previous budget. Chan has already said he cannot rule out again dipping into the reserves for 2024-2025.
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