Financial Secretary Henry Tang today welcomed rating agency Fitch's decision to upgrade its long-term foreign-currency-rating outlook on Hong Kong to 'positive' from 'stable'.

Mr Tang said the upgrade reflected international recognition of Hong Kong's improved public finances and growth prospects, adding the Government will continue to exercise fiscal discipline and to explore ways to broaden the tax base.

Fitch gives Hong Kong's long-term foreign-currency a rating of 'AA-' and its long-term local-currency rating 'AA+' with a stable outlook.

The agency attributed its upgrade to the city's  strong external financial position, continued improvements in public finances, the Government's commitment to addressing structural fiscal issues and reduced exposure to China risks.

It also acknowledged that Hong Kong's current-account surplus, at 11.4% of GDP in 2005, and Hong Kong's international reserves, at 3.8 months of currency external payments, are far better results than that of the 'AA' median.

'"We hope the solid track record in the strict adherence to the 'one country, two systems' principle will convince international credit-rating agencies to accord us a higher rating that is in line with our economic fundamentals," Mr Tang added.