Bullish finance chief to lift target for economic growth

The Financial Secretary expects to revise the full-year growth estimate of six per cent substantially upwards next month as the economy strengthens.

Donald Tsang Yam-kuen hinted yesterday that double-digit growth in exports would translate into an 'impressive performance' in the second quarter. 'We are now well on the road of recovery,' he said.

In his Budget address in March, Mr Tsang forecast the economy would grow by five per cent this year. In Washington last month, he said growth would reach at least six per cent.

Speaking yesterday at a ground-breaking ceremony for Container Terminal 9, Mr Tsang said: 'I believe I [will] have to revise our overall economic performance for 2000 . . . and that will be quite a significant improvement.'

Several experts expect growth to be at least 10 per cent this year. Growth on this scale could pose a policy problem for Mr Tsang, who earlier suggested changes to broaden the tax base. Stronger economic growth would mean higher government revenues and that could make it difficult for Mr Tsang to push through tax changes.

Economists expect the first-half economic report and revised full-year forecast due out on August 25 to show the economy recovering nicely, powered by surging exports and rekindled private consumption.

'The Government definitely needs to revise upwards,' said George Leung Siu-kei, HSBC's chief economist for Hong Kong. 'It's a must.'