FLO40 /1616
trading partners (2)
has showed
down. However, the rate
affected by the sharp
of inflation was adversely depreciation of the Hong Kong dollar
(3).
It is likely
that the rate of inflation will accelerate, when the
increase in import prices resulting from the depreciation of the Hong Kong dollar in the third quarter gradually works through to the retail level (4).
Import prices
6.3
According to the import unit value indexes
available up to August, import prices increased by an
estimated 9% in the first nine months of 1983 compared
with the same period last year. Largely reflecting the depreciation of the Hong Kong dollar during this period,
(2)
/the
Seasonally adjusted annual rate of price increase in Hong Kong's major trading partners in 1981, 1982 and 1983:
CPI/Private consumption expenditure deflator (%)
1981
1982
1983 (forecast)
United States
10.4
6.1
3.5
United Kingdom
11.9
8.6
4.8
FR Germany
5.9
5.3
2.8
Japan
4.9
2.7
2.0
OECD
10.6
7.8
5.4
Source: National Institute of Economic and Social Research,
August 1983.
(3) Using the import-weighted exchange rate index for the Hong Kong
dollar (18.12.71 = 100, 1981 weights)
weights) for illustration, the index fell from 77.3 at the end of December 1982 to 71.7 at the end of June 1983, and further to 63.2 at the end of September 1983, reflecting a depreciation of 18% since December 1982.
(4) Nevertheless, following the adoption in October 1983 of the new currency stabilization measures, the rate of inflation can be expected to ease in due course.
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