Hong Kong’s Chief Executive, John Lee, is expected to address significant economic and social challenges in his second annual policy speech. Key issues include easing property measures, boosting spending and tourism, addressing a labor shortage, and tackling falling birth rates.
Hong Kong, known for its high property prices, has seen a decline in home prices for four consecutive months. Calls are growing for the government to relax property cooling measures, such as stamp duties, to stimulate transaction volumes. The government may focus on boosting spending and tourism to counter the economic headwinds, including a challenging external environment and the impact of high interest rates.
While the city has seen an economic rebound, there are concerns about a labor shortage, which has increased by 6.3% since December 2022. Measures to attract and retain talent may be introduced, along with efforts to promote consumer spending and tourism, such as organizing international seminars and infrastructure projects.
Hong Kong‘s low birth rate, the lowest in the world according to World Bank data, is also a pressing issue. Reports suggest that the government may consider providing financial incentives, such as HKD 20,000 ($2,556), to the family of every newborn baby if at least one parent is a permanent resident.
PwC recommends additional support for full-time parents to re-enter the workforce through incentives like tax benefits, industry-specific subsidies, training, and education support. The policy speech is anticipated to outline strategies to address these challenges and promote the city’s economic recovery.
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