The Hong Kong economy grew solidly in the first three quarters of 2018, with a 3.7% real GDP growth in the first three quarters of 2018 over a year earlier. Taking into account the various increasing downside risks in the external environment, the HKSAR Government forecasts that the real GDP for 2018 as a whole will grow at 3.2%, which is within the range forecast of 3% to 4% announced by it in August 20181.
Looking ahead, the various external factors, such as the China-US trade dispute, the rise of global trade protectionism, the possible further interest rate hikes in the US and the future development on Brexit, will likely affect Hong Kong’s economy and give rise to heightened uncertainties.
Given the above external market situation and to achieve a long-term sustainable economic growth in Hong Kong, the Institute fully agrees to the HKSAR Government’s policy objectives of driving economic diversification and taking up the roles as a “facilitator” and “promoter” to foster further economic growth in Hong Kong, as stated in the Chief Executive’s Policy Address in October last year.
Following the HKSAR Government’s direction of diversifying Hong Kong’s economy and developing new industries to drive economic growth, we include in our 2019/20 budget submission a number of proposals that aim at achieving the above mentioned government policy objectives. We also include in the budget submission our proposed measures on (1) consolidating the pillar industries; (2) enhancing the competitiveness of the Hong Kong tax system; (3) enhancing closer economic collaboration with the Mainland; (4) improving people’s livelihood and (5) comprehensive review of the Hong Kong tax system, including the tax structure and tax law.