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5
THE ECONOMY IN 1980
15.
1.
1
In 1980 the gross domestic product grew by 10% in real terms
the fifth successive year of rapid growth. As in 1979, there was a
fair degree of stability with the growth rate of total final demand
roughly in line with that of the economy's output. Growth continued to
be export-led, though to a much lesser extent than in 1979. But in the
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second half of the year as Hong Kong became increasingly affected by
the sluggish state of the world economy, there was a decline in the
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growth rate of domestic exports. During roughly the same period, the
growth rate of domestic demand picked up. So in the second half of the
there was a shift from domestic exports to domestic demand as the
impetus to economic growth.:
year,
16.
Continuing the trend started in 1979, prices increased"
rapidly in 1980. This was due to similar increases in the rest of the
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world, coupled with the impact of exchange rates on the Hong Kong dollar
price of imports. Domestic, influences on prices were generally
favourable to the slowing down of inflation as there were few marked
imbalances between the demand for and the supply of domestic resources.
In particular the supply of labour grew rapidly during 1980 because of
the direct and indirect effect of immigration, and exceeded the increase
I
in demand for labour, leading to a slight rise in unemployment.
17.
The main imbalance was in the land and property market.
Prices and rents for, operty generally, and particularly for commercial
property continued to rise, reflecting a demand for commercial property
in excess of its supply in itself a sign of confidence in Hong Kong and the prices developers vero prepared to bid for land rose sharply.
But the influence on prices of demand was
/undoubtedly