2014-2015 fiscal stance to hover on "neutral to negative" for economy

Amid one-off fiscal stimulus developments.

Compared to an expansionary budget in 2013-14, the fiscal stance for 2014-15 should be somewhat neutral to negative for the economy.

According to a research note from UBS, this is amid the government starting to rein in one-off fiscal stimulus.

Meanwhile, the fiscal surplus is estimated to have narrowed to HK$12bn in FY2013-14, which is 0.6% of GDP, sharply down from 3.2% in FY2012-13.

The report noted that Hong Kong remains one of the most fiscally conservative economies in the world, which is reflected by the fact that government debt hovers around 1% of GDP.

In order for the currency peg to be credible, Hong Kong keeps fiscal deficits in check and UBS sees no foreseeable problems in this area.

Consequently, the report said, fiscal policy is not a major driver in the economy.