John Tsang, Hong Kong's financial secretary, announces the 2010 budget at the Legislative Council in Hong Kong, China, on Tuesday, Feb. 24, 2010. [CFP]

Hong Kong's financial chief John Tsang on Wednesday proposed, in a budget speech, measures to build on the economic recovery while preventing asset bubbles, in addition to relief measures worth some 20 billion HK dollars (2.56 billion U.S. dollars).

Delivering the budget proposals for the fiscal year 2010-11 at a meeting of the Legislative Council, Tsang pledged to carefully adjust exceptional measures and put in place measures to prevent asset bubbles in the local real estate market, including adjusting land supply and raising the stamp duty rate on high-end transactions.

The Financial Secretary of the Hong Kong Special Administrative Region (HKSAR) government said that he expected Hong Kong's economy to grow by 4-5 percent in 2010, with employment to further improve and the underlying inflation to be 1.5 percent.

"I am cautiously optimistic about Hong Kong's economic prospects for 2010," he said.

Tsang said the latest financial crisis was much more severe than the 1997 financial storm, but the Hong Kong economy recovered more quickly, growing by 2.6 percent in the second quarter of 2009 and contracted by only 2.7 percent for the full year.

There remained uncertainties and potential pitfalls in the external environment given that the labor markets in the developed economies have yet to improve, and it remained uncertain whether some of the economies can grow robustly after the effects of the stimulus measures subsided, he said.