Hong Kong. Photo: VCG

Hong Kong's fiscal deficits in 2020 will exceed HK$ 300 billion ($38.7 billion), which is the highest record in history and may continue in the next fiscal year, said Hong Kong Finance Secretary Paul Chan Mo-po's official blog.

Since the middle of 2019, Hong Kong's economy faced a series of downturns. Society and people's livelihood were damaged by violence. Hong Kong government had introduced relief measures of more than HK$ 120 billion in the financial budget, said Chan in the blog.

Chan argued that the economic cycle has its own rules of development and there are many ups and downs. But the appearance of the deficit in the down cycle usually lasted for a long time. For example, Hong Kong government had fiscal deficit in five years during 1998/99 to 2003/04 fiscal years.

Chan emphasized the importance of controlling government expenditure, which may influence whether the government may face the structural challenges such as the violent impact, COVID-19 impact and "sanction" from US. At present, Hong Kong government annual spending is approaching HK$ 500 billion, which is more than three times than in 1997 when Hong Kong's return to the motherland. 

Chan predicted that the fiscal deficit will continue in 2021/22 fiscal year. In this case, Hong Kong government will keep implementing new financial policies by launching more minor projects to increase employment opportunities and bring benefits to other industries.

In addition to continuing to provide support to small and medium-size enterprises through financing guarantee schemes, Hong Kong government will also continue to communicate with various sectors of the markets to explore how to help the damaged industries.