“Hong Kong’s economy is facing enormous challenges this year,” Chan said, predicting a range of 0.5 percent growth to a 1.5 percent contraction this year.
The recession is a major headache for the city’s unelected pro-Beijing leader Carrie Lam who currently boasts record low approval ratings after facing down huge democracy protests.
The massive rallies and regular clashes with police that became a weekly fixture last year were dying down before the outbreak began. But the virus has comprehensively ended mass gatherings.
Yet public anger still simmers in a city where neither its leadership nor Beijing have addressed the issues fuelling years of rising resentment.
In Wednesday’s budget, the police received a 25 percent bump to HK$25.8 billion.
Neighboring Macau often announces universal cash handouts to residents in its annual budget, while Hong Kong has historically been more reticent. The last one for all residents was in 2011, three years after the global crash sparked the city’s last recession.
Last week Hong Kong’s government announced a HK$30 billion relief fund for those hit hardest by the virus outbreak, including cash handouts for businesses like restaurants and travel companies.
The last time Hong Kong ran a deficit was between 2001 and 2004. Chan said the reserves should see the city through the current crisis
“In the medium term, the economic outlook of Hong Kong remains positive,” he said.