Hong Kong cash handout aims to boost business
Hong Kong permanent residents will receive a $10,000 cash handout (US$1200) from the government in coming weeks as the territory’s administration tries to boost an economy crippled by more than six months of protests and now the coronavirus crisis.
The move was to be announced by financial secretary Paul Chan Mo-po during his budget speech this morning, according to the South China Morning Post.
The payments, to residents aged over 18, are part of a broader relief package aimed at relieving pressure on business and individuals and protecting jobs. The government is also expected to offer a guarantee on loans taken out by companies to cover rent and wages.
Meanwhile, across the border, the epidemic is dampening the prospect of an upturn in the economy, according to GlobalData economic research analyst Shruti Upadhyay.
“Considering the effect of deadly Covid-19 on various sectors, the stagnation of production processes along with quarantine restrictions had a considerate spillover effect on industries such as travel & tourism, retail & consumers, automobile, e-commerce, technology and transport.”
If the country experiences a rapid recovery from the virus by next month, GlobalData projects economic growth of 5.4 per cent for the first quarter. But in an alternative scenario of moderate recovery from the virus by April, real GDP is expected to grow at 4.4 per cent. In the worst case scenario, if containment of the virus fails, the economy might witness growth of 3.9 per cent during the quarter.
“The outbreak is anticipated to essentially affect the country’s ability to meet the purchasing agreement targets of importing US$200 billion of goods decided in the phase one deal signed between the US and China, apart from pre-trade war purchases, leading to a plethora of upcoming concerns for the country,” said Upadhyay.
DFS keeps stores shuttered
In other coronavirus-related news, DFS Group says it will extend the closure of two of its Hong Kong stores closed earlier this month.
“In our ongoing efforts to protect our customers and staff against Covid-19, we have decided to maintain the temporary closure of T Galleria by DFS, Tsimshatsui East and T Galleria Beauty by DFS Moko until March 16. We will continue to assess the situation and react accordingly,” said a spokesperson.
The closures were described as “purely a preventative step” to allow it to focus resources and efforts on a reduced store footprint while balancing the need to continue to serve its customers.
“To date, there have been no cases of the coronavirus in any of our store locations and we will continue to take all necessary precautions to ensure our stores remain hygienic and safe environments for all,” the spokesperson said in an email to Inside Retail Asia.