Hong Kong budget 2021-22: finance chief Paul Chan reserved on cash handouts, cites Covid-19 pandemic challenges

Financial secretary says he expects first half of new year to remain challenging, with 2020 figures on track for a full annual economic contraction

He also doubles down on news that hard-hit residents will not be able to access pension funds early

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Hong Kong finance minister Paul Chan. Photo: SCMP

Published: 4:39pm, 9 Jan 2021Updated: 11:41pm, 23 Feb 2021

Hong Kong financial chief Paul Chan Mo-po has expressed reservations about a fresh round of cash handouts for struggling residents amid the Covid-19 pandemic, citing challenges ahead in the first half of the year.

Chan told a Saturday radio programme on the coming budget address that the economy had shrunk 3.2 per cent in the first three quarters of 2020, on course for an overall contraction for the whole of last year.

It would be the first time Hong Kong had ever recorded two consecutive annual contractions, the financial secretary said, after the city was hit by months-long anti-government protests in 2019, when the economy shrank 1.2 per cent.

Hong Kong has weathered many storms over the past two years, such as the months-long social unrest, tense US-China relations and the Covid-19 pandemic. Photo: Sun Yeung

The unemployment rate stood at a high of 6.3 per cent compared to recent years, accounting for 240,000 residents, while the underemployment rate hovered at 3.4 per cent, or 130,000 people.

But Chan also maintained the government had no plan to allow those in desperate need to access their Mandatory Provident Fund, the city’s pension scheme early, saying authorities would “explore other ways”.

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