Monitor | Tsang's budget will do nothing to solve Hong Kong's twin problems
Despite city's rude fiscal health, a structural glut of government cash and sky-high property prices are two sides of the same coin
Tomorrow Financial Secretary John Tsang Chun-wah will stand up to deliver his sixth budget speech.
The finance ministers of most developed economies would be green with envy at the strength of Tsang's position.
In his speech he is likely to announce an economic growth rate for last year of around 1.5 per cent. That might not sound very impressive. But with much of the developed world struggling to escape recession, it counts as a robust performance.
Even better, as the first chart below shows, Hong Kong's economy is forecast to grow by almost 4 per cent this year, which marks the city out as one of the strongest rich economies around. At the same time, unemployment is low at just 3.4 per cent, while inflation remains muted at 3 per cent.
And almost uniquely outside the oil-exporting sheikhdoms of the Persian Gulf, Hong Kong's government finances are in rude health. Last February Tsang forecast that the government would run a deficit for the 2012/2013 fiscal year of HK$3.4 billion.