The Hong Kong government said on Monday it was optimistic about the economic outlook but warned that its planned bond sale could be affected by interest rate rises and would not necessarily be issued all at once.
"We still maintain our target date of mid-July for government bonds," Financial Secretary Henry Tang told the Legislative Council in a briefing on the economic outlook.
The issue would, however, be subject to the interest rate environment and the market's ability to digest it.
"We have not excluded issuing it in tranches," Tang said.
The government has already appointed banks to handle the debt sale, which could be worth up to HK $20 billion (US $2.56 billion) and marks the government's first foray into the debt market in more than a decade.
US interest rates, which Hong Kong tends to track due to its currency peg to the US dollar, were expected to start rising this summer but increases were likely to be moderate because US inflation at about 1.8 percent was mild, government economist Elley Mao said.
The government said it maintained its six percent forecast for growth in Hong Kong's gross domestic product this year and said the figure could be conservative.
"We are cautiously optimistic on the economy," Tang said.
Economic recovery has been driven by strong exports and a rebound in domestic demand and tourism since last summer.
Recent tightening measures by Beijing were likely to enable the Chinese economy to achieve a soft, not a hard, landing and that would be positive for Hong Kong, Tang said.
An improving economy meant that the unemployment rate - one of Asia's highest at 7.1 percent - had a chance to fall below seven percent, he said, but he would not forecast how far he expected it to fall.
Tang said he hoped the territory would be able to work with Beijing to expand the individual visit scheme that has allowed mainlanders in certain provinces to travel more freely to Hong Kong.
That has triggered a tourism boom and helped the economy as mainlanders spend on average HK $6,000 per head while in the territory, according to Tang.
Oil prices, meanwhile, were an economic risk and were likely to remain volatile after recently hitting record highs, but at the moment were not affecting the economy, Mao said.
"Hong Kong's economy is mainly focused on services oil costs are less than five percent of total production costs," Mao said. "But if our trading partners were more affected by oil price rises our exports would be hit. So far we haven't seen this."
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