Monday, April 06, 2009

Hong Kong welfare

While Cactus Kate is in town and deep throating tons of Bluff oysters down at the waterfront, Hong Kong's premier is using her absence as a good time to announce extra possible stimulus spending. From the FT:

“I’ve got HK$400bn (US$51.6bn, €38.3bn, £34.9bn) in the bank, so I’m in a good position to spend more if I want to . . . If necessary we will do something in the middle of the year,” he said...

Last year the government rolled out stimulus spending equivalent to 3.4 per cent of gross domestic product, and Mr Tsang signalled he was prepared to do something similar. Ten large infrastructure projects are being accelerated partly to absorb thousands of construction workers returning from Dubai and the nearby gambling centre of Macao, where a five-year construction boom has petered out.

One trigger for additional stimulus could be rising unemployment, which at 5 per cent is relatively high for Hong Kong but still below the 8 per cent reached during the Sars epidemic. “I hope we won’t go that far,” said Mr Tsang.