The economy will grow by 2% to 3%, Hong Kong Financial Secretary Paul Chan said, after the 3% pace in 2018. For the final three months of 2018, GDP expanded 1.3% from a year earlier. Output contracted when compared with the third quarter.

“As a small and totally open economy, Hong Kong has been susceptible to economic headwinds over the past few months, as evidenced by notable slackening growth and diminishing confidence of enterprises in the future outlook,” Chan said according to a prepared statement online.

In his speech announcing the new budget, Chan emphasised caution on the outlook for the global economy and Hong Kong, while looking ahead to “enormous business opportunities in close proximity” to Hong Kong as a key cog in the Greater Bay Area development spearheaded by China.

On the tax front, Chan introduced a 75% reduction for salaries tax and tax under personal assessment up to a maximum of HK$20,000 for the year, benefiting an estimated 1.91 million taxpayers and reducing government revenue by HK$17 billion. That’s a lower cap than the HK$30,000 a year ago.