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FS speaks on the Policy Address

    Following is the transcript of remarks (English portion) by the Financial Secretary, Mr John C Tsang, at a media session after attending a radio programme on the Commercial Radio this morning (October 13):
Reporter: Mr Tsang, what kind of inflation figures are you expecting in 2007 fiscal year? What are your expectations?

Financial Secretary: The inflation as of this time, we still have about 1.5% inflation rate, the underlying rate actually is 2.5% with the concessions that we have given in terms of rates and vouchers and so forth. I have one percentage point to shave off, so we are looking at a 1.5% inflation rate, but we can see that with the weakening of US dollar and the strengthening RMB, and the import prices particularly for lots of the food products have increased, we see a sort of creeping up of the inflation rate, so we expect probably by the end of the year, may be another 0.3% to 0.5% increase bringing it up to about 2% for the year.

Reporter: Will you have more tax concession measures in your upcoming budget?

Financial Secretary: This is something that we are considering and obviously you don't expect me to tell you that there will be or there will not be any, but this is something that we are considering at this time.

Reporter: Mr Tsang, what kind of budget surplus are you expecting in this financial year? How much will it be and how do you see the stock market?

Financial Secretary: We expect a healthy surplus, but we can't tell you exactly how much we have because thereˇ¦s still towards half way through the year. We don't know how much we will be getting exactly from land sale, and we don't know how the market in terms of our stamp duty we will be collecting and we have not started to collect the taxes yet, which don't come in until early next year. So a lot of that will be coming in but as I have indicated that we expect something about $50 billion in terms of surplus.

Reporter: What about the stock market? How do you see it, is it too high?

Financial Secretary: I never will predict how high the stock market would be. Itˇ¦s healthy and we are making sure that all the brokers are ˇ§healthyˇ¨. We are continuing doing stress tests for all the different brokers and so far we have not detected any problems.

Reporter: So the investors can continue to invest in the market?

Financial Secretary: Well, investment is up to individual investors, it is their decision to make. But what I would just say is that, for the small investors, I think they need to be more careful because this is a very volatile period with ups and downs, you know sometimes go up to over a thousand points and that is a period of major volatility and I think the small investors need to be very careful at this time.

(Please also refer to the Chinese portion of the transcript.)

Ends/Saturday, October 13, 2007
Issued at HKT 13:03


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