Budget 2023-24: Hong Kong finance chief plans to issue infrastructure bonds and sell them to public to ease cash flow pressure
- ‘Bond scheme would ensure Hong Kong’s debt levels remain at a very safe level,’ says Financial Secretary Paul Chan
- City is on track for an economic rebound following return to post-pandemic normality, says expert
While Hong Kong’s financial health will not return to the black until 2024-25, the government plans to set up an unprecedented scheme to issue infrastructure bonds to ease its cash flow pressure.
In his first post-pandemic budget speech on Wednesday, Financial Secretary Paul Chan Mo-po warned that the city would plunge into a bigger deficit than he anticipated, at HK$139.8 billion (US$17.8 billion) in 2022-23. This will be the third deficit in four years.
Chan said the government spent about HK$100 billion on infrastructure projects annually. He planned to submit a proposal to the Legislative Council in 2023-24 to enable the issuance of infrastructure bonds and explore the possibility of selling them to the public.
He said Hong Kong’s debt levels as a result of the potential bond scheme would remain at “a very safe level” even when it was projected to reach 9.5 per cent of gross domestic product (GDP) in the 2027-28 financial year.
“At a nearby place, a city that is often compared to Hong Kong, its government’s debt level is 130 per cent [of GDP]. By comparison, our current borrowing is at a very safe level,” he said at a press conference after the budget speech. Sources said he was referring to Singapore.
A government source said financing infrastructure projects through bonds would ensure construction would continue in a steady manner.