Hong Kong Economic Stimulus to Impact Commodity Market

Commodity market is all about investment. Investors are those who have adequate amount of money remaining after the fulfillment of pre-requisites and necessities of their life. And when we talk about the investment, income and expenditure pattern of people come into a direct play. It is already a well-known fact that Hong Kong is a booming economy in the world, though it started up as a business transition economy. The income and expenditure pattern of people in the place have already reached to a sophisticated style. But like Norway has both sunshine and dark night at the same time in the country, Hong Kong does not only have pros. The income gap of the people has been widening day by day there which is drawing massive government attention. This is why government seems like adopting a policy to boost the government expenditure on the poor as an initiation to decrease down the income gap between the people. Currently, the government shows a surplus of HK$55 billion, reserves rather increasing very high to HK$724 billion and leaving lots of scope to invest for the income generation programs that could actually help in decreasing the income gap.

It was just last week when the Hong Kong economy slightly relieved itself from the upcoming threat of market failure. The property-sales tax in the country was almost doubled but because the market discipline was not maintained, the taxes crossed over the highest of 1997 and almost threatened the market of either creating the unsustainable market bubble or the market failure. Due to this reason, the affordability of people for the properties came down and the government thought of coming up with a plan to circulate money in the market to facilitate the property market in the economy. One thing is pretty sure that there is still a long way to go as recovery from the wealth disparity has been a tedious task, may it be in classical era or the post-modern era.

The measure that is thought of to tackle this difficult situation is by redistribution of wealth, and developing a mechanism to fight youth unemployment and then promoting government welfare packages. First objective of the program happens to be promoting the supply of housing, challenge the current pollution scenario and then enhance the elderly care. Now, it’s a tedious task for the government to prepare a full-proof budget proposal incorporating these plans where there are anticipations that the policy might be conservative. The Gini coefficient, measure of income inequality, has shown a significant increment and is still above 0.50 which is a headache for the policymakers.

Coming to where we started from, because Hong Kong is a place with many professional and potential investors for the commodity market, the economic recovery in the place is expected to show some real impact in the commodity market.