Hong Kong's Financial Secretary Paul Chan presented budget proposals for the fiscal year starting in April 2024 on Wednesday, highlighting support measures for businesses and residents as the financial hub faces mounting fiscal deficits and economic headwinds.

KEY FIGURES * Says 2023 GDP expanded 3.2% * Forecasts 2024 GDP growth between 2.5% and 3.5% * Projects 2024 headline inflation at 2.4% * Estimates 2024 underlying inflation at 1.7% * Q4 GDP grows 4.3% year-on-year * Q4 GDP grows 0.4% quarter-on-quarter * Forecasts average growth rate at 3.2% per annum in real terms from 2025-2028 * "Hong Kong's economic outlook is bright. Despite a host of prevailing challenges, we will find infinite opportunities ahead, as long as we stay on top of global trends and dare to explore." PROPERTY MEASURES: * Says to cancel all demand-side property tightening measures for residential units * Says there is room to further adjust measures for property market

* 2024-25 Land Sale Programme will cover a total of eight residential sites

* Government has identified sufficient land for meeting the supply target of 308,000 public housing units over the next 10 years * Says potential supply of first-hand private residential units for the next three to four years will be around 109,000 units

MEASURES ON FINANCE/TOURISM

* Says will waive stamp duties payable on transfer of REIT units * Says to open up new capital sources, including those from the Middle East * Says will stage more than 80 mega events in first half of this year to boost tourism * Says to earmark $100 million to boost mega-event promotions over the next three years * Says to stage fireworks and drone show every month to boost tourism * Says to roll out over HK$1 billion to support tourism industry * Says to reduce profits tax payable by 100%, capped at HK$3,000 * Says to reduce salaries tax payable by 100%, capped at HK$3,000

* Says to issue HK$120 billion in bonds in 2024/25 financial year

* Plans to issue bonds of HK$95 billion to HK$135 billion per annum in the next five years to drive the development of the Northern Metropolis and other infrastructure projects SPECIFIC INDUSTRIES:

* Says first registration tax concessions for electric vehicles, due to terminate at end-March, will be extended for two years, to encourage wider use of EVs * Says first registration tax for other types of electric vehicles, including electric commercial vehicles, electric motorcycles and electric motor tricycles, will continue to be waived in full over the next two years * Says to earmark HK$10 billion to promote the development of life and health technology * Says to provide one-stop support to attract more local, Mainland and overseas pharmaceutical and medical device enterprises to conduct clinical trials in Hong Kong

* Says to develop high value-added maritime services

* Says to offer block registration incentive to attract shipowners to register ships in Hong Kong extensively

LIVELIHOOD

* The 2024-25 estimated recurrent expenditure for healthcare is $109.5 billion, accounting for about 19% of government recurrent expenditure

* Says to increase the duty on cigarettes by HK$0.80 per stick, with immediate effect, and duties on other tobacco products will be increased by the same proportion

* Says tobacco duty in the retail price of cigarettes will rise to about 70%

* Says relevant bureaux will review modes of operations of two transport subsidy schemes but government has no intention to cancel the schemes

GOVERNMENT ESTIMATES

* The 2023-24 revised estimate on government revenue is HK$554.6 billion, lower than the original estimate by 13.7%

* Revenue from land premium is HK$19.4 billion, lower than the original estimate by HK$65.6 billion and far lower than the previous year

* The revised estimate of total government expenditure for 2023-24 is $727.9 billion, down 10.2% compared with the previous year, and is 4.3% lower than original estimate

* Expects a consolidated deficit of HK$101.6 billion for 2023-24, and fiscal reserves are expected to be HK$733.2 billion by end-March 2024

* Total government expenditure for 2024-25 will increase about 6.7% to HK$776.9 billion, with its ratio to nominal GDP projected to increase slightly to 24.6%

* Total government revenue for 2024-25 is estimated to be HK$633 billion, while earnings and profits tax are estimated to be HK$279.6 billion

* Revenue from land premium for 2024-25 is estimated to be HK$33 billion and revenue from stamp duty is estimated to be HK$71 billion

* Taking into account the bond issuance of HK$120 billion in 2024-25, it is expected that there will be a deficit of HK$48.1 billion for the year and fiscal reserves will decrease to HK$685.1 billion

* In 2024-25, the government will maintain zero growth in the civil service establishment

* After taking account of proceeds from the issuance of bonds, the consolidated account will only record a deficit in 2024-25 and will turn to a surplus in subsequent years

* Fiscal reserves are estimated at HK$832.2 billion by the end of March 2029, representing 21.2% of GDP, or equivalent to approximately 12 months of government expenditure

* Ratio of government debt to GDP will be in the range of 9 to 13% from 2024-25 to 2028-29

* "On government's fiscal situation, we should not just focus on the short-term situation, but should look at the fiscal position over the entire economic cycle." (Reporting by Hong Kong newsroom; Editing by Lincoln Feast and Sohini Goswami)