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Medium Range Forecast

193.     On the medium range forecast, after a deficit in the Operating Account for 2008-09, we expect a return to a surplus from 2009-10 onwards. The operating surplus will increase to $67.3 billion in 2012-13. For the Consolidated Account, we forecast a deficit in 2008-09, followed by surpluses in the following years. The surplus will increase to $75 billion in 2012-13. We forecast that the fiscal reserves will range between $480 billion and $720 billion over the next five years. We also estimate that operating expenditure will increase moderately, at a rate commensurate with economic growth over the next few years.

 

2008–09
($ billion)

2009–10
($ billion)

2010–11
($ billion)

2011–12
($ billion)

2012–13
($ billion)

Operating revenue

249.4

293.0

309.2

329.0

353.8

Operating expenditure

255.7

237.3

251.5

267.8

286.5

Operating surplus/(deficit)

(6.3)

55.7

57.7

61.2

67.3

Capital revenue

58.5

60.4

59.9

63.4

67.5

Capital spending (including payments from the Capital Investment Fund)

57.0

63.4

62.7

57.8

59.8

Repayment of government bonds and notes

2.7

3.5

Capital financing surplus/
(deficit)

(1.2)

(6.5)

(2.8)

5.6

7.7

Consolidated surplus/(deficit)

(7.5)

49.2

54.9

66.8

75.0

- as a percentage of GDP

0.4%

2.7%

2.8%

3.2%

3.3%

Fiscal reserves

477.4

526.6

581.5

648.3

723.3

- as a number of months of government expenditure

18

21

22

24

25

- as a percentage of GDP

27.7%

28.5%

29.4%

30.7%

32.0%

Public expenditure

332.1

320.7

335.3

347.5

369.0

- as a percentage of GDP

19.2%

17.4%

17.0%

16.4%

16.3%

194.     In 2008-09, we will take appropriate, targeted measures to help economic and social development. We will increase expenditure on social services and welfare and return part of our resources to the people on a one-off basis. We will also inject funds into the MPF accounts of low income earners. These measures will lead to a decrease in revenue and an increase in expenditure in 2008-09. I have also earmarked $50 billion to prepare for the future health care financing arrangements. This reflects the Government's commitment to the people and our principle of investing in the community.

 

 

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Last revision date : 14 May, 2008