Hong Kong's Budget Deficit Expected To Hit $HK100 Billion This Year
Hong Kong's Financial Secretary Henry Tang is to raise the government's budget
deficit forecast to a record HK$100 billion (US$12.93 billion) for the current
fiscal year when he gives a financial update later this month, a
government official told the Wall Street Journal. The announcement marks the second time that the government has revised its forecast
upwards, and this will push back the government's target for eliminating the deficit
back by two years to 2008/2009. It is expected that Tang will blame the worsening
fiscal situation on the lingering effects of the SARS crisis earlier in the
year, which was a major setback for the territory's economy. It is also anticipated that the reasoning given by Tang for pushing back the government's
target for a balanced book by two years will be to give the city extra time
to recover from the shock of the SARS crisis. The situation has been compounded
by a major slump in the property market, declining exports and rising social
costs. .
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