Hong Kong Cuts Taxes as GDP Forecast to Shrink as Much as 3%
Hong Kong will make temporary tax cuts and boost spending on infrastructure to prop up an economy heading for its first full-year contraction since 1998, the government said.
Financial Secretary John Tsang announced a one-off salary- tax reduction and waivers of property rates for two quarters in his budget speech to lawmakers today.
Gross domestic product may shrink 2 percent to 3 percent in 2009 as the global financial crisis cuts jobs and exports, after a 2.5 percent expansion last year, the government said. Capital- works spending will be “very high,” including HK$39.3 billion ($5 billion) in 2009-10, and the city will run deficits for the next five years, Tsang said.