Hong Kong's economy leaped 6.8 percent in 2006, Hong Kong Financial Secretary Henry Tang Ying-yen said in his presentation of the 2007-2008 Budget to the Legislative Council Wednesday morning.
Tang said the economy has continuously enjoyed above-trend growth over the past three years and become more and more broad-based, registering an average annual increase of 7.6 percent.
Total retail sales for 2006 registered an increase of 23 percent over those of three years ago. And overall investment has been accelerating for four years in a row. The overall investment grew 8 percent last year, the biggest rise since 2000, according to the budget.
The number of negative equity cases in Hong Kong had fallen from the peak of over 100,000 to 8,400 by the end of 2006, in tandem with a significant recovery in the property market.
Total visitor arrivals also rose from some 15 million three years ago to more than 25 million in 2006, an increase of more than 60 percent.
Tang said as at mid-February, Hong Kong stock market's total capitalization had increased by 300 percent over its 2003 trough.
Along with the strong recovery of the economy, the deflation that had persisted for years also ended in mid-2004.
With strong economic growth, Tang said the total employment in Hong Kong has hit new highs successively over the past three years, with the latest figure close to the 3.5 million mark, up by more than 310,000 over its low point in 2003. The unemployment rate has fallen from its peak of 8.5 percent in mid-2003 to a six-year low of 4.4 percent, Tang said in his budget presentation.
The financial position of the Hong Kong Special Administrative Region (HKSAR) has improved markedly as a result of strong economic recovery, Tang said. He estimated that operating expenditure for 2006-2007 will be 195.7 billion HK dollars (US$25.1 billion), a moderate increase of 1.7 percent over the 2005-2006 figure.
Tang said the government operating expenditure has been contained within 200 billion HK dollars (about US$25.6 billion) for three years in a row.
"This is no mean accomplishment," he said.
The government revenue is far higher than expected, Tang said, due to the strengthening economy, increased corporate profits and salaries, the buoyant stock market and a stable property market.
For 2006-2007, Tang forecast surpluses of 38.6 billion HK dollars (US$4.95 billion) in the Operating Account and 55.1 billion HK dollars (US$7.1 billion) in the Consolidated Account, both higher than the government's previous estimates.
"The variances between the revised and original estimates are essentially due to our economy's better-than-expected performance over the past 12 months," Tang explained.
Last year, Hong Kong's gross domestic product grew by 6.8 per cent, significantly higher than the 4 to 5 percent forecast by the market and the HKSAR government earlier in the year.
According to the budget, investment income and revenue from land premiums, stamp duty, profits tax and salaries tax alone are about 31 billion HK dollars (about US$4 billion) higher than the original estimates.
(Xinhua News Agency March 1, 2007)