The government is likely to record a budget surplus of about HK$70 billion this financial year, according to consensus estimates by leading accounting firms.
Hong Kong's reserves may balloon to a record of almost HK$600 billion - after officials had forecast a HK$25.5 billion deficit.
The expected surplus has put the government in a more comfortable position to cope with the uncertain economic environment, especially in Europe and the United States.
At a projected HK$582.4 billion to HK$590.4 billion, the reserves would be equal to 33.5 per cent to 33.9 per cent of the city's estimated gross domestic product this year, according to forecasts by accounting firm Ernst & Young.
If International Monetary Fund recommendations that Hong Kong's reserves be set at 30 per cent to 50 per cent of GDP are followed, the government could have at least HK$50 billion to use, said Agnes Chan Sui-kuen of Ernst & Young.
'If our budget estimates are correct, then there is an extra 3 per cent of GDP that can be used before our fiscal reserves fall below the IMF's minimum. But we are suggesting the government spend 1 per cent of GDP on various measures now as a sort of pilot scheme to see how effectively the funds are used. Then, if more is needed, we can better spend the money,' Chan said.
