| Medium Range Forecast and Fiscal Reserves |
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| Medium Range Forecast |
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| 99.
If our estimated economic growth is achieved and the proposals are implemented in respect of expenditure and revenue and for issuing government bonds, the medium range forecast for 2004-05 to 2008-09 will be as follows:
| Year |
2004-05
($ billion) |
2005-06
($ billion) |
2006-07
($ billion) |
2007-08
($ billion) |
2008-09
($ billion) |
| Operating revenue |
165.6 |
170.7 |
177.7 |
184.9 |
194.8 |
| Operating expenditure |
212.2 |
210.6 |
207.1 |
203.5 |
200.0 |
| Operating surplus/(deficit) |
(46.6) |
(39.9) |
(29.4) |
(18.6) |
(5.2) |
| Capital revenue |
37.9 |
56.8 |
44.5 |
56.0 |
49.3 |
| Capital spending (including payments from the Capital Investment Fund) |
53.4 |
52.3 |
45.9 |
39.6 |
37.1 |
| Capital financing surplus/ (deficit) |
(15.5) |
4.5 |
(1.4) |
16.4 |
12.2 |
| Government bond issuance |
|
|
|
|
|
| - Proceeds |
20.0 |
- |
- |
- |
- |
| - Interest expense |
0.5 |
1.0 |
1.0 |
1.0 |
1.0 |
| Capital financing surplus/ (deficit) after bond issuance |
4.0 |
3.5 |
(2.4) |
15.4 |
11.2 |
| Consolidated surplus/(deficit) before bond issuance |
(62.1) |
(35.4) |
(30.8) |
(2.2) |
7.0 |
| - as a percentage of GDP |
4.9% |
2.7% |
2.2% |
0.2% |
0.5% |
| Consolidated surplus/(deficit) after bond issuance |
(42.6) |
(36.4) |
(31.8) |
(3.2) |
6.0 |
| -
as a percentage of GDP |
3.4% |
2.7% |
2.3% |
0.2% |
0.4% |
| Fiscal reserves after bond issuance |
223.8 |
187.4 |
155.6 |
152.4 |
158.4 |
| - as number of months of Government expenditure |
10 |
9 |
7 |
8 |
8 |
| Public expenditure |
286.0 |
277.7 |
270.2 |
264.3 |
259.3 |
| - as a percentage of GDP |
22.5% |
20.8% |
19.3% |
18.0% |
16.9% |
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| 100.
We forecast an operating deficit of $46.6 billion for 2004-05. The operating deficit will gradually decline, falling to $5.2 billion in 2008-09. |
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Chart
5 |
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| 101.
In respect of the consolidated account, we estimate that a deficit of $42.6 billion will occur in 2004-05, equivalent to 3.4 per cent of GDP. The consolidated deficit will also gradually decline, and a surplus of $6 billion will be recorded in 2008-09, equivalent to 0.4 per cent of GDP. |
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| 102.
While there will be a mild consolidated surplus in 2008-09, the operating account for that year will still record a deficit. To achieve the target of restoring fiscal balance by 2008-09, I will review our economic and financial position annually and put forward the necessary operating revenue proposals at the appropriate time. |
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