Hong Kong trims forecasts

HONG KONG is sharply downgrading its economic forecasts for the coming year, even though the administration believes it is in better shape than its Asian neighbours. Delivering the first budget of the Special Administrative Region of Hong Kong, Sir Donald Tsang, the financial secretary, surprised the market with what he called "the largest package of tax reductions in Hong Kong's history".

Corporate tax will be reduced from 16.5 to 16 per cent, alongside a host of other corporate tax concessions designed to placate the business sector. The standard rate of income tax remains at 15 per cent, while higher personal allowances and changes to tax bands will deliver tax cuts for nearly all taxpayers.