6
undoubtedly exaggerated and aggravated by speculation.
But in the
latter months of 1980, the increasing supply of land and property
coupled with high interest rates appeared to be having some effect on
demand.
18.
I should add that the two disturbing and inflationary features
of last year
rapid growth of domestic demand in the second half and
very high land and property prices, were both supported by a rapid
expansion of credit.
THE ECONOMY IN 1981
19.
Although we can
In 1981, developments in the economy have been, to some extent,
a continuation of the trends of the second half of 1980. In the first
six months, the growth rate of domestic demand continued to be rapid
and so the relative shift from domestic exports to domestic demand as
the main impetus to economic growth was maintained.
expect the G.D.P. to grow by 10% in real terms such growth is still
being led by domestic demand. But we can take comfort from the fact
that domestic exports are holding up remarkably well despite adverse
conditions abroad, and we expect an increase over 1980 of about 7% in
real terms, helped mainly by fairly buoyant demand from the US.
Although this growth rate is lower than those recorded in the previous
three years (during which Hong Kong experienced the longest sustained
export boom in the 1970s), at 7% it is a very respectable rate in the
circumstances.
It is also reassuring that the growth rate of domestic
demand now shows signs of slowing down.
/20.