8
oil consumption by 8% below the "corresponding period" (unstated) in
1973: comparing electricity production for Jan.-March 1973 and 1972
the decline is only 3% however. And "winter" is in any case the slacker
season for energy consumption.
The problems with Saudi Arabia are now apparently over and
Haddon-Cave's earlier public claim (end-February) that he did not think
oil supplies would be reduced badly enough to endanger the normal working
of the economy may be justified*. In the same speech he also appeared
to discount the likelihood of shortages of oil-based raw materials (e.g.
plastics) for industry. Nevertheless, there has been some talk of
scarcity of Japanese plastics which Hong Kong uses.
-
The price effects of the crisis are quite another matter.
Haddon-Cave mentioned, for example, the doubling of electricity charges
to bulk users, which could add at least 2% to industrial costs.
Outlook for 1974
In such circumstances, forecasts are, as he rightly suggests,
Nevertheless, he assumed that price-
"little more than heroic guesses".
inflation in 1974 will not differ greatly from the rate experienced last
year, when the GDP "deflator" index evidently rose by only 10% against
an 18% rise in the consumer price index.
On this basis he claimed to expect a 4% real growth in 1974
GDP (i.e. 14-15% in money terms).
forecasts at current prices:
This in turn hinged on the following
(a) domestic exports up by 24%, imports by 27% and no great change
in the overall payments balance;
(b) private consumption up by about 20% (19% in 1973);
(c) government consumption up by 14% (18% in 1973);
(d) gross domestic capital formation up by 18% (24% in 1973).
*It is hard to pontificate about this. But supplies from Singapore,
which accounted for well over half Hong Kong's oil imports (in value) last year, may not be seriously at risk. And China, hitherto a negligible supplier, has now reportedly pledged to provide 0.3 mn. tons p.a. (cf. however some 5 mn. tons released from bond in 1973, noted above).
* The frimes at (6)(C): () worked seem high for a 14-15% rise in GDP as a whole: I cannot an la