In a bid to save the economy after months of anti-government protests and the coronavirus epidemic, Hong Kong’s government is handing out a total of $15.4 billion (HK$120 billion) in relief funds to all permanent residents age 18 and over, $1,200 (HK$10,000) each. The hope is that the handout will save jobs and ease the burden on local companies.
According to the South China Morning Post, $9.12 billion (HK$71.1 billion) will go to residents, while the remainder of the relief funds will go to stimulating segments of the economy including health care, technology and tourism.
Hong Kong’s Financial Secretary Paul Chan stated in his budget speech Wednesday that the deficit is on track to reach an all-time high of nearly $18 billion (HK$140 billion).
“The deficits are mainly caused by the fact that government revenue cannot keep up with drastic increases in government expenditure, especially recurrent expenditure. Since January 2020, Hong Kong has come under the threat posed by the novel coronavirus outbreak, which further dealt a blow to the economy. We must take decisive measures to tackle the situation.”
Director of the Economist Corporate Network Janet Pau says the handouts could encourage residents to spend more, but may not replace the lack of tourism spending.
“Mainland tourist arrivals have been decimated by months and months of social unrest, and we will have to see if there’s going to be a pick up after this kind of twin crises.”
In an investor newsletter on Wednesday, Bitcoin bull and Morgan Creek Digital co-founder Anthony Pompliano says the initiative is the latest episode in the ongoing devaluation of fiat currency around the world.
“We are entering a world where governments are showing us that the money they manage is not nearly as valuable as it used to be. Don’t listen to what they say, watch what they do. In the case of Hong Kong, they are literally giving the money away. I don’t know about you, but I don’t give away things that I find valuable.”