"As far as our target for achieving fiscal balance, it is a fact that government revenue is in direct correlation with GDP growth. So with a better-than-expected GDP growth, it is logical to expect that our revenue will increase alongside. So the circumstances are favorable that we may be able to announce better-than-expected results," he said.

Speaking on a radio talk show, Tang said introducing a goods and services tax is a controversial issue and requires thorough discussion in the community.

He pointed out the economic growth forecast for 2005-06 has been revised upward to 7 percent from 4.5 percent to 5.5 percent as the economy's performance is better than expected. The improving economy may also be conducive to achieving budget balance and more details will be announced in February, he added.

Tang said Hong Kong is constantly influenced by the economic situation of business partners like the Mainland and U.S. as well as high oil prices. He is prudent with the economic outlook for 2006-07.

He admitted high oil prices may affect Hong Kong's exports, adding the city also faces challenges brought by the ever-growing Mainland economy. Enditem