TNAG-1361-FCO40-1807-Hong-Kong-Hansard-reports-and-minutes-of-the-meetings-of-the-1985 — Page 206

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becomes $37.4 billion and the deficit for the year is estimated at $1 billion (69).

Government Bonds

136.

In April 1984 the Government sold bonds with a face value of $1 billion by public tender. The effect of this was to

avoid an equivalent reduction in the fiscal reserves. It was a measure designed to fit last year's budgetary strategy.

137. The fact that the Government can borrow large sums of money must be set against the costs involved, the possibility that repayment may fall due at a time when external problems are affecting our exports and thus our GDP and government revenue, the need to restrain public sector expenditure, and the general debility created by unnecessary but easy borrowing.

is

138.

From a strictly budgetary point of view there

presently no reason again to contemplate a bond issue. Nevertheless, should any particular specific capital requirement arise, I would be prepared to consider borrowing by means of an appropriate bond issue. If for example it proves necessary to increase the equity of the MTR, a government bond issue might be part of an overall package.

(69)

$mn

$mn

Revenue

Recurrent Capital

Expenditure

Recurrent

Capital

Surplus on recurrent account

Deficit on capital account

Overall deficit

34,871

2,530

37,401

29,685

8,677

38,362

5,186

G.F. 316

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-6,147

-

961