Financial Secretary Henry Tang said March 15 that Hong Kong had posted its first budget surplus in five years as the economy bounced back strongly in 2004 with growth of 8.1%. This expansion was the highest in four years and above the average annual growth rate of 4.8% of the past 20 years.
Tang forecast a budget surplus of 12 billion Hong Kong dollars ($1.54 billion) in the year to March 31 2005, equivalent to 0.9% of Gross Domestic Product (GDP) and the first since 1999-2000 thanks to better-than-expected premiums from land sales. Expenditure for 2004-05 fell to 201.2 billion dollars, the first time in more than 50 years spending had actually been reduced.
After being buffeted by the Asian financial crisis, the dotcom bubble and the 2003 SARS outbreak, the financial secretary said Hong Kong would continue to be exposed to outside factors including oil prices, currency fluctuations, China's economic growth and changes in its policies. He called China both a major boon but also a strong competitive force for Hong Kong. "The development of the mainland has also emerged as a strong competitive force for Hong Kong, threatening even some of our industries which had long had an edge over our competitors, such as logistics," Tang said.
Copyright Agence France-Presse, 2005