18.
To sum up:
-
in a situation in which those producing for domestic demand are better able to pass on price increases
to consumers than those producing for export markets even
allowing for the helpful effects in some markets of the
depreciation of the Hong Kong dollar - an excess of demand for,
over supply of, real resources is contributing to the high
growth rate of those components of GDP catering for domestic
demand, namely, private consumption expenditure, Government
consumption expenditure and gross domestic fixed capital
formation (9). However, with the economy as a whole enjoying double-digit growth for the third year running, it is in-
escapable that the relatively higher growth rates in those
sectors must slow down so that resources can be made available
to the export sector and the severity of the adverse trade
balance (likely to be of the order of $7 billion in 1978) can
be diminished (10).
(9) Growth rates (%) in real terms:
1972-76 1977 (average)
1978 (forecast)
Gross domestic product
8.8
11.4
10
Private consumption expenditure
7.9
14.9
13
Government consumption expenditure
9.3
13.3
14
Gross domestic fixed capital formation
6.6
25.7
15
Exports of goods:
8.3
5.4
11
Domestic exports
8.5
5.3
7
Re-exports
7.9
5.6
25
Imports of goods
6.4
7.9
15
(10) Trade balances in $ billion:
1976
1977
1977
1978
(9 months) (9 months)
Exports
41.6
44.8
32.6
38.0
Imports
43.3
48.7
35.2
44.0
Balance
1.7
3.9
- 2.6
- 6.0
10
/(c)
Adverse