Tread carefully: Financial Secretary John Tsang urges investors to be cautious when investing in the stock market, as stock prices may go up as well as down.

With the better than expected income from land sales and stock-market transactions, the Government's surplus may reach $50 billion in this financial year, Financial Secretary John Tsang says.

Speaking on a radio talk show today, Mr Tsang said the Chief Executive's Policy Address has already promised to cut the salaries and profits taxes to 15% and 16.5%. He will continue to listen to the community's views on the budget and make a balanced decision early next year.

Mr Tsang said inflation is expected to rise to 2% by the end of the year, adding it is still a mild rise compared with a 5%-6% GDP growth.

However, he admitted that price rises have affected the poor sector. He said the Government will study how to assist them to help themselves, and that one of the best ways is to create more jobs.

He said the Policy Address has announced the Government will push ahead with 10 large-scale infrastructure projects and a rough estimate finds that about 250,000 jobs would be created.

This will help people to get a job and improve their standard of living.

He said Hong Kong is facing keen competition from regional cities for convention and exhibition services. The Government will continue its discussions with the sector to find ways of strengthening Hong Kong's competitiveness.

The completion of the Convention & Exhibition Centre extension will help meet demand in the mid-term, he said, adding more places will be considered for the industry's future development.

Commenting on the recent stock market performance, he urged investors to be cautious when making any decisions, as stock prices may go up as well as down.