The last time the administration had a surplus in the first eight months of the financial year, which starts in April, was in pre-crisis 2007, when the figure stood at HK$50.6 billion.

'The surplus in November was mainly due to the collection of profits tax,' a government spokesman said yesterday.

The latest announcement showed a far better financial picture than the government had forecast. In his budget speech in February, Financial Secretary John Tsang Chun-wah projected a net deficit of HK$25.2 billion for the current financial year.

However, consensus estimates among most accounting firms now put the full financial year budget at a surplus of at least HK$60 billion.

PricewaterhouseCoopers tax partner Marcellus Wong Yui-keung said profits tax revenue in November and December and income from salaries tax in January meant these three months were almost always surplus months.

Depending on various items of government spending, February and March could also yield surpluses, Wong said. Salaries tax income collected in January is for 2009 earnings.

Over the past decade, the difference between the government's revised surplus estimate and the final result has ranged from about HK$3 billion to HK$11.6 billion. Conservative government forecasting made such differences common, Wong said.

In 2009-10, the administration had a surplus of HK$25.9 billion despite forecasting a deficit of HK$39.9 billion.

The reserves stood at HK$537 billion as of November 30, compared to HK$455.5 billion a year earlier. Total government debts stood at HK$11 billion, compared to HK$12 billion at the end of November 2009.

Although signs of recovery have emerged over the past few months, with unemployment falling to 4.1 per cent in November, the government has repeatedly cautioned against the possible impact on Hong Kong's economy brought by uncertainties in Europe and the United States.

The city is also facing inflationary pressure. The consumer price index in September was up 3.2 per cent year on year, with food costs up 5.1 per cent.

Political parties are calling for handouts and various measures to help people cope with rising prices.

Tsang will deliver this year's budget on February 23.

Brighter picture

The surplus recorded for April to November stands at HK$17.2 billion

In his February budget the financial secretary forecast a net deficit for this financial year, in HK dollars, of: $25.2b