Hong Kong $5.2 Billion Budget U-Turn May Fuel Inflation Threat

Hong Kong’s decision to hand out HK$40.5 billion ($5.2 billion) in cash and tax rebates in its latest budget may stoke inflation, which Financial Secretary John Tsang said was the economy’s main threat this year.

Tsang yesterday abandoned a Feb. 23 budget plan to inject HK$24 billion into pension fund accounts, caving into demand from lawmakers for a cash handout and tax rebates, after polls showed the government’s popularity slumped.