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Hong Kong Unveils $500 Million More in Stimulus to Help Businesses

Eric Lam

(Bloomberg) -- The Hong Kong government announced further stimulus measures worth around HK$4 billion ($511 million) Wednesday, aiming to shore up businesses suffering from almost six months of political unrest.

A list of nine new measures included subsidies for water and sewer bills as well as waivers on property tax rates for businesses. Individuals and companies also may apply to pay profits and salaries tax in installments, Financial Secretary Paul Chan said at a news conference Wednesday alongside other members of the administration.

Stimulus measures announced since June amount to about HK$25 billion, Chan said, reiterating that the government expects to post a budget shortfall this fiscal year.

Economists have previously criticized the government’s support measures as “peanuts.” Earlier Wednesday, the International Monetary Fund said Hong Kong should add fiscal spending equivalent to 2.5% of gross domestic product over the next two years. Before today’s announcement, the government’s extra spending had totaled less than 1% of GDP.

Hong Kong’s business outlook fell to a near record low in November, according to IHS Markit, as businesses remain under pressure after almost half a year of unrest on the city’s streets and export weakness amid the U.S.-China trade war.

The Securities and Futures Commission said earlier it will waive annual licensing fees for the 2020-2021 financial year to relieve regulatory cost burdens on the industry amid a challenging market environment. The initiative will cost about HK$117.5 million in foregone revenue, in addition to the 50% waiver announced earlier this year.

--With assistance from Shawna Kwan, Dominic Lau and Foster Wong.

To contact the reporter on this story: Eric Lam in Hong Kong at elam87@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Jodi Schneider, Jeffrey Black

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