Hong Kong's budget deficit fell 41 percent in the fiscal first quarter from a year ago, the government said on Saturday, reflecting improved economic conditions and a resurgent property market.
The sharp decline was helped by a pickup of land sales in May. Stamp duties on property transactions are a prime source of government revenue.
The deficit totalled HK$17.04 billion (US$2.18 billion) for the quarter, according to a government statement. The figure compared with a deficit of HK$28.9 billion from April to June last year.
The deficit for the first two months of the fiscal year was HK$9.2 billion and it was HK$7.8 billion in June, the government said. Fiscal reserves stood at HK$258.3 billion as of June 30, down from HK$286.6 billion at the end of May.
The government forecasts its budget deficit will total HK$42.6 billion for the fiscal year ending March 31, 2005, up from a provisional HK$40.1 billion for 2003/04.
Credit rating agency Standard & Poor's said recently that the deficit would likely come in below estimates and that economic recovery and public spending cuts had put the government on course to meet its target to balance its books by fiscal 2008/09.
However, official figures released on Thursday indicate the government's revenue projections for this year may be too optimistic.