Hong Kong’s finance minister has stated the consumption e-vouchers could provide a bigger boost to the economy than first forecast.

 

Paul Chan Mo-po said that the level of competition among payment service providers selected to administer the e-vouchers, as well as the firms attracting customers to spend them, appeared likely to fuel growth that will surpass expectations.

“We’re quite optimistic the growth brought about by the e-vouchers might exceed the predicted 0.7%,” Chan said, although it was too soon to call exact figures.

“When the first round of vouchers was disbursed, we saw the atmosphere among retailers and restaurants was good … In August, we raised our outlook for this year’s overall economic growth from the original 3.5 to 5.5% to 5.5 to 6.5%,” the finance minister added.

The HK$36 billion (US$4.6 billion) initiative, which aims to bolster local spending and speed up Hong Kong’s economic recovery from the pandemic, offers every adult resident HK$5,000 in local spending vouchers. Around 7.2 million people are eligible for the scheme, reports South China Morning Post.

Hong Kong has been gradually coming out of a two-year retail slump, driven by several months of anti-government protests followed by the coronavirus crisis.

Retail sales in Hong Kong increased 2.9% year on year in July, albeit the lowest rise in six months. Whereas on a monthly basis, retail sales fell 3.2% in July compared to the previous month. Yet authorities are confident the e-voucher initiative will boost the economy.

“We hope the e-voucher scheme can also help stabilise the employment market as it spurs economic recovery, particularly as the retail, food and beverage and tourism industry employ a third of the city’s population,” Chan said.

In addition, Peter Shiu Ka-fai, the lawmaker representing Hong Kong’s wholesale and retail sector, said he forecasts a boost of up to 0.9% from the e-voucher plan.

“The atmosphere has been really good, with the coronavirus situation under control locally, Hong Kong winning at the Olympics, and businesses really stepping up and offering all kinds of deals. So we’ve been seeing a very enthusiastic response from residents,” he said.