PART II: THE ECONOMIC OUTLOOK
4. THE FORECAST INCREASE FOR REAL G.D.P. FOR 1977 IS 7% AT CURRENT
PRICES IT IS 14%. THIS ASSUMES AN AVERAGE INCREASE OF 8% IN THE PRICES OF EXPORTS AND IMPORTS AND, TOGETHER WITH THE FORECAST INCREASES IN QUANTITIES, THIS IMPLIES A WIDENING OF THE TRADE DEFICIT, CONFIRMING THE ASSUMPTION USED IN THE FORECAST THAT THE HONG KONG DOLLAR WILL NOT STRENGTHEN FURTHER IN 1977. THE GROWTH RATE OF REAL G.D.P. IS EXPECTED TO SLOW DOWN TO 6% IN 1978.
PART 111: THE STATE OF THE PUBLIC ACCOUNTS
5. THE ACTUAL OUTTURN FOR 1975-76 WAS A SURPLUS OF DOLLARS 224 MILLION. REVENUE AT DOLLARS 6,256 MILLION (EXCLUDING PROCEEDS OF LOANS) WAS CLOSE TO THE ORIGINAL ESTIMATE OF DOLLARS 6,184 MILLION. EXPENDITURE AT DOLLARS 6,032 MILLION WAS BELOW THE APPROVED ESTIMATE
BY DOLLARS 583 MMILLION, OR 8.8%, OF WHICH ALL BUT DOLLARS 168 MILLION WAS ON CAPITAL ACCOUNT.
6. THE RESULT WAS THAT FISCAL RESERVES AT 1ST APRIL 1976 AMOUNTED
TO DOLLARS 2,810 MILLION, INSTEAD OF DOLLARS 2,626 MILLION AS PREDICTED IN THE 1976 BUDGET SPEECH.
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7. THE REVISED ESTIMATES FOR 1976-77, AS PRINTED, SHOW A SURPLUS OF DOLLARS 557 MILLION, WITH REVENUE AT DOLLARS 7,400 MILLION AND EXPENDITURE AT DOLLARS 6,843 MILLION.
8. BUT THE REVISED ESTIMATE OF EXPENDITURE IS PROBABLY TOO HIGH AND
BASED OF REVENUE A LITTLE TOO LOW. A SURPLUS OF DOLLARS 850 MILLION, ON THE TREASURY'S CASH BOOK AT MID-FEBRUARY, IS ASSUMED FOR DETERMINING THE LIKELY FINANCIAL POSITION AT 1ST APRIL 1977, AND SO FISCAL RESERVES BY THEN ARE ESTIMATED AT DOLLARS 3,660 MILLION,
/PART IV:
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