CODE 18-77
Reference
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to Stone
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My Segrok, FED (paras 7-9)
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Mr
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HKD
Maß 100/2
Useful. He promises more - which might permit
From: C E Lane
Date: 6 March 1992
cc: Mr Broadbent Mr Burns
a short note to ps/dc.
기
Fr
HONG KONG BUDGET 1992/93
*
Outturn for 1991/92 better than anticipated, but only temporary improvement.
*
Budget 1992/93 shows slight surplus but has risks of higher inflation.
* Need to keep options for new/higher taxes on the table.
* Forecast of 1997 reserves HK$ 72 bn plausible, if unnecessary assurance, but we need to see assumptions used.
* Lu Ping's comments unhelpful and incorrect.
Fiscal Position
Hong Kong Central Government Fiscal Position
88/89 89/90 90/91 91/92 91/92
92/93 bud. est. bud.
Revenue/GDP
16.1
16.2
15.7
16.3
17.0
17.2
Expenditure/GDP
11.9
14.0
15.0
16.1
14.9
16.5
Surplus (deficit)/GDP 4.2
2.2
0.7
0.2
2.2
0.7
1.
The estimated budget outturn for 1991/92 is a surplus of 2.2
per cent GDP, about 2 per cent more than the budget estimates.
This represents a quite substantial deflation and has undoubtedly kept the lid on inflation during the past year. A fiscal expansion of 1.5 per cent GDP is planned in 1992/93 lowering the surplus to 0.7 per cent GDP.
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