Sun, Jan 05, 2003 - Page 11 News List

Hong Kong fears downgrade from expanding deficit

AFP , HONG KONG

Hong Kong Monetary Authority chief Joseph Yam said Saturday he has confidence in the government's ability to tackle its spiralling budget deficit, adding the territory had ample fiscal and foreign reserves.

Although the budget's deficit stood at some HK$71 billion (US$9.11 billion) at the end of November, Yam noted the territory had the highest value of net-external assets in the world.

"We have quite a lot of fiscal reserves and we have quite of foreign reserves and Hong Kong has net-external assets which is equivalent to 2.6 times the GDP, which is the highest in the world," Yam told local radio.

He said he hoped international ratings agencies would take these factors into account when considering Hong Kong's sovereign ratings.

He conceded, however, that a budget deficit of "5 percent or 6 percent is high and it has got to be dealt with."

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