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The following is the transcript (English part) of a media session by the Financial Secretary, Mr Donald Tsang, after visiting participants of the Youth Pre-employment Training Programme at the Police Training School today (Friday):

FS: I wish to report to you that the GDP performance of Hong Kong in the third quarter of this year, compared with the same period of last year, represents an increase of 4.5 per cent. This is quite a significant rise from the second quarter performance of 0.7 per cent and compared with the negative 6.8 per cent in the third quarter of 1998. It has been quite a marked and robust performance. The increase is largely export-led. Export has registered a real increase of 8 per cent and there was of course complementary growth in retail and also in tourism, which has got quite a large increase in arrival.

Both the securities market and the property market have been stabilised and are doing quite well. Having regard to all these factors, our Government Economist has concluded, and I concur with his conclusion, that the GDP growth for 1999 as a whole would be 1.8 per cent over 1998, which is significantly higher than 0.5 per cent which I forecasted in March this year. But there are, of course, certain areas of uncertainty. These include the mismatch in Japanese and American economy which continue to cause fluctuation in the yen-dollar exchange rates and that, in return, will affect the recovery rate in the region. Internally, we also have to face the challenge of relatively high cost of operation in Hong Kong, compared with our competitors and of course there are budget deficit we have to overcome in the coming year. But all the indications suggest that the deficit which I forecasted in March this year for 1999 as a whole - the forecast deficit of HK$36 billion would be considerably less in the out-turn. The exact figures I do not know yet but I will certainly be accounting for it in the next budget.

Question: Is the government not going to raise any fees and charges?

FS: We must realise that the question of fees and charges has been a controversial issue. But we have frozen for a considerable period of time, so when economy picks up we must address this issue, we have an economy famous for financially prudent, this is a matter we must not ignore. If we ignore this and not continue to do what we need to do, I am sure it is going to affect investors' confidence in Hong Kong in the long run. But it is a matter not only for myself, but a matter for the whole community and it is important for us to make sure deficit for next year should be reduced as much as possible. And fees revision is one of the measures we consider.

Question: (unemployment situation)

FS: I wish our unemployment situation could be resolved as quickly as possible. But we have to realise it is a data which is likely to lag behind the economic growth rate, so I hope we will have some improvement in our unemployment figures next year.

Financial Secretary's Transcript (Chinese part)

End/Friday, November 26, 1999

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