Hong Kong government’s problem is not deficits but structural surplus, say economists
Annual surplus likely to be just shy of HK$160 billion by the end of financial year, source suggests, as pressure mounts on financial chief for budget giveaways
Hong Kong is set to reap a bumper budget surplus this year as experts warn of a structural surplus problem, with HK$120 billion already in the bag and the final figure likely to be just shy of HK$160 billion by the end of March, according to figures obtained by the Post.
The massive projected surplus, at least seven times the original estimate of HK$16.3 billion for 2017-18, has reignited criticism of officials’ conservative calculations, and the resultant failure to invest in things like public hospitals and helping the elderly and the young.
Experts chastised officials for taking what they called a doom-and-gloom outlook and forecasting a fiscal structural deficit by 2021. One economist said the problem was the exact opposite, with the city facing a structural surplus.
With such resources at his disposal, pressure is piling on Financial Secretary Paul Chan Mo-po to give one-off relief measures when he delivers his annual budget on February 28.
While big accounting firms had predicted that the surplus – that is, a positive difference between the government’s income and its outgoings – this year might be between HK$160 billion and HK$180 billion by the end of March 2018, a source familiar with the fiscal position predicted a final figure just below that range.
Hong Kong chief executive says city’s next budget could be ‘full of surprises’
This year’s projection would smash a record set in the last financial year, when the city reeled in a surplus of HK$92.8 billion, eight times the original estimate of HK$11.4 billion.
