HONG KONG, Feb 21 Reuters Hong Kong is under pressure to rein in spending when it unveils its annual budget on Wednesday, after racking up huge fiscal deficits during the COVID19 pandemic and as it struggles to kickstart the economy and regain its financial lustre.

The sustainability of the city39;s fiscal reserves has come under the spotlight after the authorities spent more than HK600 billion containing the spread of infections and providing economic relief for businesses and families struggling with pandemic restrictions.

This whittled down the Asian financial hub39;s fiscal reserves to around HK800 billion 102 billion equivalent to 12 months of government expenditure around half the levels three years ago.

As our economy and market came under pressure, we took exceptional measures during exceptional times to safeguard people39;s livelihood, Financial Secretary Paul Chan wrote in a recent blog post. However, as our economy stabilises, we have to make adjustments to our fiscal measures accordingly.

PWC estimates a budget deficit of HK109 billion for 202223. That compares with a shortfall of HK56.3 billion or 1.9 of GDP, projected by the government in its budget last year.

Chan, who will present the budget at 11 a.m. 0300 GMT on Wednesday, noted a need to rein in spending now that many COVIDrelated restrictions have been lifted, but he said any moves would be carefully considered.

Even though the government is under tremendous pressure to reduce public…