Hong Kong is expected to record its second worst deficit at more than HK$100 billion ($12.74 billion) amid the ongoing COVID-19 pandemic, Finance Secretary Paul Chan Mo-Po said in his recent blog.

China Daily quoting Chan reported that the deficit would mark the second-highest ever, behind only the HK$232.5 billion record in 2020, adding that the number will be even worse if it excludes the HK$35 billion raised through the issuing of Green Bonds this year. Writing on his weekly blog, the Minister said government income is going to fall short while expenditure has risen.

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“In fact, small to medium enterprises and workers are all facing different degrees of economic pressure. The same goes for the government’s financial income,” he wrote, according to a local public broadcasting service in Hong Kong.

“Both the external economic momentum and conditions of local markets have encountered a strike by the pandemic and the tightened monetary policies of central banks,” he said, as per the publication.

He also added that the economic situation is expected to remain very challenging for the next few quarters, with the key still hinging on whether the Covid epidemic is brought further under control.

Meanwhile, Hong Kong Chief Executive John Lee on Tuesday said that his government intended to make an announcement soon on the city’s controversial hotel quarantine policy. “We know exactly where we should be heading and want to be consistent as we move in that direction. We would like to have an orderly opening up,” Lee told reporters, as per Al Jazeera.

Since Hong Kong’s population peaked at the end of 2019, the number of residents aged under 20 has fallen by 97,000, with declines of 235,000 for those in their 20s to 30s and 84,000 for those in their 40s to 50s.

As the Chinese government tightens control over Hong Kong schools, many families with children are moving to countries like the UK and Canada in pursuit of more freedom in education.

In an August report by the Hong Kong Investment Funds Association, 13 per cent of its members reduced their workforce in Hong Kong, while 35 per cent moved some or all of their Hong Kong operations elsewhere. Around 70 per cent said it was “extremely difficult” to hire and retain foreign workers in Hong Kong, Asia Nikkei reported.