Wednesday, February 27, 2008

Hong Kong, With Surplus, Cuts Taxes to Boost Growth

Hong Kong reported a record budget surplus and announced tax cuts and
increased spending aimed at supporting the economy as a global
slowdown spreads.
Financial Secretary John Tsang, in his first annual budget speech to
city lawmakers, announced both one-time giveaways and permanent cuts
in company, personal, alcohol and hotel taxes to redistribute the
surplus, especially to poorer people.
Hong Kong is trying to contain inflation near a nine-year high, while
providing jobs as global demand falters. The city's economic growth
will probably slow to 4 percent to 5 percent this year, after dropping
to 6.3 percent last year from a revised 7 percent in 2006, Tsang said
Singapore, which reported its biggest budget surplus in at least a
decade earlier this month, announced a package of cash handouts and
rebates to help cushion the effect of inflation, running at the
fastest in 25 years.

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