HONG KONG, Feb. 22 (Xinhuanet) -- Hong Kong's Financial Secretary Henry Tang Wednesday outlined measures aimed at consolidating the current economic recovery and pursuing further development.

    Delivering his third government budget at the Legislative Council, Tang said Hong Kong economy rose by 7.3 percent in 2005 compared to the previous year and unemployment rate dropped to a four-year low of 5.2 percent.

    Capitalizing on the present opportunity and further developing economy is the mainstream social consensus in Hong Kong, he said.

    With a record high of nominal GDP at 1,382.2 billion HK dollars(175.35 billion U.S. dollars) last year, Hong Kong has now fully emerged from the Asian financial crisis and has regained its strength and vitality, Tang said, adding that he was cautiously optimistic about this year's economic outlook.

    He forecast real GDP growth of 4 to 5 percent in 2006, slightly higher than the trend growth rate over the past 10 years.

    In the medium term from 2007 to 2010, he forecast a 4 percent trend GDP growth rate in real terms, and a 2 percent trend rate ofincrease in the GDP deflator. The forecast trend growth rate of nominal GDP over the period from 2007 to 2010 is therefore 6 percent.

    He said the government will restore fiscal balance in the current fiscal year to end on March 31 in both the operating and consolidated accounts for the first time in eight years - three years ahead of schedule.

    Strong economic performance in 2005 coupled with the government's spending cuts will result in a 5.8 billion (748 million U.S. dollars) operating surplus and a 4.1 billion HK dollars (529 million U.S. dollars) consolidated surplus for the 2005-06 financial year, he said.

    Other fiscal targets would also be met ahead of schedule. Operating expenditure fell for the second year in a row in 2005-06,and stayed below 200 billion HK dollars (25.8 billion U.S. dollars) , while public spending fell and remained below 20 percent of GDP starting from 2004-05.

    Tang said the government's fiscal targets are to keep its accounts in balance and the share of public expenditure in the gross domestic product (GDP) at 20 percent or below over the next few years. For 2006-07, public expenditure is forecast at around 18 percent of GDP, lower than most other developed economies.