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The Government announced today (June 30) its financial results for the two months ended May 31, 2004.

Expenditure for the period April to May 2004 amounted to $39.9 billion and revenue to $30.7 billion, resulting in a deficit of $9.2 billion.

A Government spokesman said that a deficit in the initial months of a financial year was not unusual as many types of revenue including taxes were mostly received towards the end of a financial year.

The fiscal reserves stood at $266.1 billion at May 31, 2004.

More detailed figures are shown in Tables 1 and 2.

TABLE 1. CONSOLIDATED ACCOUNT

                                           Year to date 

                           Month ended     April 1, 2004 to

                           May 31, 2004    May 31, 2004

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

                           HK $ million       HK $ million

  Revenue                   14,735.5           30,664.6

  Expenditure              (20,539.3)         (39,910.9)

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

  Surplus/(Deficit)         (5,803.8)           (9,246.3)

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

  Financing

    Domestic

      Banking Sector(Note 1) 4,969.9              8,131.4

      Non-Bank Sector          833.9              1,114.9

    External                     -                    -

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

  Total                      5,803.8              9,246.3

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

  Government Debt as at May 31, 2004 (Note 2)  HK$6,000 million

  Debts Guaranteed by Government as 

    at May 31, 2004 (Note 3)                   HK$4,022.9 million

Notes:

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

2. In May 2004, the Government issued a $6 billion Toll Revenue Bond to be repaid by the net toll revenue receivable of Government-owned tunnels and bridges to Hong Kong Link 2004 Limited, which issued notes and bonds totalling the same amount to institutional and retail investors. The maturity date of the Toll Revenue Bond is May 2016 and full repayment may be made before 2016.

3. Guarantees provided under the Special Finance Scheme for Small and Medium Enterprises, the Self-employment Business Start-up Assistance Scheme, the SME Loan Guarantee Scheme, the Film Guarantee Fund and the Loan Guarantee Scheme for Severe Acute Respiratory Syndrome Impacted Industries.

  TABLE 2.  FISCAL RESERVES

                                           Year to date 

                           Month ended     April 1, 2004 to

                           May 31, 2004    May 31, 2004

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

                           HK $ million       HK $ million

  Fiscal Reserves at        271,900.2          275,342.7

    start of period

  Add: Consolidated         (5,803.8)           (9,246.3)

    Surplus/(Deficit)

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

  Fiscal Reserves           266,096.4          266,096.4

    at end of period       =============   ====================

Ends/Wednesday, June 30, 2004

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