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| No.2 April, 2011 |
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Financial Secretary Unveils 2011-12 Budget |
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 Hong Kong's economy grew by 6.8 percent in real terms in 2010 but rising inflation loomed in 2011, the Financial Secretary John C. Tsang revealed in his 2011-12 Budget speech.
Mr. Tsang said the economy staged a full recovery at a faster pace than expected in 2010 thanks to the strong growth in the Mainland of China and Asia.
 Hong Kong's exports of goods soared by 17.3 percent in real terms in 2010, while private consumption spending grew by 5.8 percent and investment spending grew by 8.1 percent.
The job market also improved significantly, with unemployment dropping to 3.8 percent.
Mr. Tsang said the strong economic recovery, a soft U.S. dollar and rising food and commodity prices around the world would cause inflationary pressure to gradually build up this year.
In the short term, the government would strive to ease domestically generated price pressure by forestalling property market exuberance, preventing excessive credit growth and pursuing a prudent fiscal stance.
Mr. Tsang unveiled plans to issue HK$5 billion (A$625 million) to HK$10 billion (A$1.25 billion) worth of inflation-linked retail bonds, or iBonds, to provide Hong Kong residents with another investment option for coping with inflation while promoting the development of the local retail bond market.
Mr. Tsang cited the risk of asset-price bubbles as another challenge in 2011. He said the most effective medium to long term solution to the property market problems was ensuring steady and adequate land supply.
Emphasizing that investing in Hong Kong's future economic development was necessary to maintain the city's competitiveness , he announced record infrastructure spending and a series of initiatives to foster growth in key economic areas.
The Financial Secretary estimated that capital works expenditure would reach a record HK$58 billion (A$7.3 billion) in 2011-12 as the 10 major infrastructure projects continued to be rolled out over the next few years. These projects include the Hong Kong-Zhuhai-Macao Bridge, the Hong Kong section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, and the Kai Tak Development Plan stage 1.
To enhance Hong Kong's competitiveness as an international business centre, the Financial Secretary pledged to increase the supply of office space and develop high-grade office clusters through land use planning, urban design, area improvement and the provision of better transport networks.
Looking ahead, the Financial Secretary said the government would strive to develop Hong Kong's four pillar industries: trade and logistics, professional services, tourism and financial services.
To further diversify the economy, he said the government would continue to roll out support measures for the six industries identified as having clear advantages; namely, medical services, testing and certification services, education services, environmental industries, cultural and creative industries and innovation and technology.
2011-12 Budget: http://www.budget.gov.hk/2011/eng/speech.html |
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