Wednesday, October 1, 2014   

(2014-15 Budget) Tsang predicts fiscal deficit in seven years
(02-26 13:40)

Financial Secretary John Tsang Chun-wah warned that a structural budget deficit is inevitable.
He cited findings by a working group which predicted a deficit in seven years.
Tsang also forecast the economy to grow 3 to 4 per cent in 2014, below the average annual growth rate of 4.5 per cent over the past decade.
He said projections by the Working Group on Long-Term Fiscal Planning, “spark off a clear warning and call for serious attention. If government expenditure keeps growing and outpacing economic and revenue growth, a structural deficit would be inevitable.’’
If services were to be improved at about 3 percent annually for education, social welfare and healthcare, on top of adjustments for demographic and price factors, government expenditure would grow at an average 7.5 percent a year.
Such a scenario could lead to a structural deficit “in seven years' time,'' Tsang warned
   
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