Chief Executive Tung Chee-hwa has warned of an 'unexpectedly large' budget deficit this year.
In his keynote speech at the opening yesterday of the 14th general meeting of the Pacific Economic Co-operation Council, Mr Tung also said the Government's earlier economic forecasts had to be significantly revised in the wake of the September 11 terrorist attacks.
Mr Tung gave a bleak picture of the economy in the run-up to the Government's announcement of third-quarter gross domestic product tomorrow.
Government economist Tang Kwong-yiu is expected to revise downward the annual growth rate forecast.
The Government slashed its growth forecast to 1 per cent at the end of August. Second-quarter GDP grew by 2.5 per cent. Mr Tung had earlier hinted the third quarter figure would be negative. Hong Kong, he said, would face negative growth for 'a few quarters'.
Mr Tung said: 'The September 11 events have brought about deepening economic uncertainties around the world.
