Medium Range Forecast and Fiscal Reserves
Medium Range Forecast
82. If our economy grows as forecast and we can implement our expenditure and revenue proposals, the medium range forecast for 2006?7 to 2010?1 will be as follows:
83. I forecast a surplus of $0.6 billion in the Operating Account for 2006?7, and this will build up to $22.9 billion in 2010?1. In respect of the Consolidated Account, I estimate that a surplus of $5.6 billion will occur in 2006?7, and this will build up to $32.6 billion in 2010?1.
84. The projected surplus in both accounts over the next five years is to a great extent based on our forecast of economic growth. Taking such growth into account, we will increase operating expenditure moderately over the next few years to enhance the quality of government services and cater for inflation. However, Hong Kong faces many challenges. Having regard to prevailing circumstances in the next five years, we will review our expenditure guidelines annually to ensure that we continue to manage our public finances prudently and keep expenditure within revenue limits.
