Here's a brief preview of the Hong Kong budget

Will fiscal surplus hit HK$55b?

According to BofAML, Financial secretary John Tsang is scheduled to announce: 1) the government’s latest estimate on the FY2012-2013 fiscal result; 2) the FY2013-2014 fiscal budget (April 2013 to March 2014); and 3) the 4Q12 GDP figures on 27 February (coming Wednesday). 

Public attention has shifted to this budget speech after Chief Executive Leung Chun-ying delivered his first policy address last month.

The budget proposal is critically important as the ideas, principles and policy measures spelled out in the policy address cannot be implemented without government funding.

Here's more from BofAML:

Nevertheless, in our view, its impact on GDP will probably be mildly positive rather than notably stimulating.

The fiscal outcome for FY2012-2013 looks set to surprise on the upside again. Revelations last month that the government has already recorded a fiscal surplus of HK$40 billion in the first nine months of FY2012-2013, prompted us to expect the current year’s fiscal surplus to probably be hefty at about HK$55bn (or 2.9% of GDP).

This is contrary to the government’s previous expectation of a deficit of HK$3.4 billion. The surplus would raise HK’s fiscal reserves to HK$ 724 billion (38.1% of GDP, or roughly 23 months of government expenditure).