Hong Kong will not be able to attain its earlier forecast of 3% GDP growth, Financial Secretary Antony Leung told legislators today.

He said it was difficult at this stage to predict with any accuracy the impact that atypical pneumonia will have on our economy, apart from scuppering our forecasted GDP growth.

Mr Leung said the Government will announce the updated economic forecasts as soon as they are available.

"Since I delivered the Budget on March 5, there has been a spate of significant events. While the war in Iraq was factored into the Budget, we could not anticipate the outbreak of atypical pneumonia," Mr Leung said.

"The disease has dealt a serious blow to the community at large, and in particular to sectors such as tourism and others dependent on domestic consumption, including retail, catering and entertainment."

He said the Government understands that the virus is adding to the financial hardship of the general public and businesses.

On April 7 he listened to the views of various political parties on the matter, and said he will consider their suggestions seriously.

"Since the atypical pneumonia problem will impede economic growth, and consequently reduce government revenue, we will keep a close watch on the situation and assess its impact," he said.

"If the Government and the citizens are of one mind, it is certain that Hong Kong can soon win this battle against the disease, revive the economy and tide over our difficulties."

He said preparations are underway for the day when the disease has been brought under control so the Government can launch a series of measures to revitalise our economy.

He maintained that elimination of the fiscal deficit remained the Government's medium-term task over the next five years, and Mr Leung stood behind his budget proposals.

"Restoring the health of our public finances is an essential element of maintaining stable development," he said.

For Mr Leung's full speech in LegCo, click here.