Financial Secretary Paul Chan says he's not optimistic about the outlook for Hong Kong's economy, citing a range of factors including falling export volumes and rising interest rates.

On Friday, the government downgraded its GDP growth forecast for the year, predicting the local economy to shrink by 3.2 percent. Its previous estimate ranged from a contraction of 0.5 percent to a 0.5 percent expansion.

On a radio programme on Sunday, Chan also noted that a fiscal deficit of more than HK$100 billion is expected this year.

"There are a few reasons, including poor market conditions, shrinking corporate profits tax, relatively quiet stock and property markets, and less revenue from stamp duties. So a fiscal deficit is inevitable," he said.

However, Chan said there is no need to be too pessimistic about the economy, adding that the government will consider spending some of its HK$800 billion of fiscal reserves on counter-cyclical measures if the economy continues to weaken.

Speaking ahead of a trip to Indonesia for a G20 leaders' summit, the minister said he hopes to showcase Hong Kong's unique position to the international community.