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The Government announced today (October 31) its financial results for the six months ended September 30, 2002.

Expenditure for the period April to September 2002 amounted to $119.4 billion and revenue to $48.6 billion, resulting in a deficit of $70.8 billion.

A Government spokesman explained that some major revenue items including salaries and profits taxes were mostly received towards the end of a financial year. It was too early at this stage to draw any conclusion on the deficit outturn for the full year.

There were two major uncertainties on the revenue side for the coming months, namely land premium and sale of the second tranche of MTR shares. Depending on the outcome of the major revenue items, the budget deficit for 2002-03 could be larger than $45.2 billion estimated in March 2002.

The fiscal reserves stood at $301.7 billion at September 30, 2002.

More detailed figures are shown in Tables 1 and 2.

TABLE 1. CONSOLIDATED ACCOUNT

                                        Year to date


                   Month ended          April 1, 2002 to


                   September 30, 2002   September 30, 2002


                   ------------------   ------------------


                    HK $ million         HK $ million


Revenue             5,238.7              48,609.4


Expenditure        (20,000.8)           (119,414.0)


                   -------------        ------------


Deficit            (14,762.1)            (70,804.6)


                   -------------        -------------






Financing


  Domestic


    Banking Sector(Note 1)    14,804.3      69,692.9


    Non-Bank Sector           (42.2)        1,111.7


  External                      -              -


                         -------------     ------------


Total                         14,762.1       70,804.6


                         -------------     ------------




Government Debt as at September 30, 2002 (Note 2)  NIL




Debts Guaranteed by Government                   


  as at September 30, 2002 (Note 3)        HK$1,179.7 million

Notes :

1. Includes transactions with the Exchange Fund and resident banks.

2. The Government is debt free.

3. Guarantees provided under the Special Finance Scheme for Small and

Medium Enterprises, the Self-employment Business Start-up Assistance

Scheme and the SME Business Installations and Equipment Loan Guarantee

Scheme.

TABLE 2. FISCAL RESERVES

                                        Year to date


                   Month ended          April 1, 2002 to


                  September 30, 2002   September 30, 2002


                  ------------------   ----------------


                   HK $ million         HK $ million 




Fiscal Reserves at start     316,460.8     372,503.3


  of period


Add: Consolidated Deficit    (14,762.1)    (70,804.6)


                             -----------   ---------


Fiscal Reserves at           301,698.7      301,698.7


  end of period              -----------   ---------

End/Thursday, October 31, 2002

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