the Hong Kong
linked rate. The Financial Secretary of the
Government recently reaffirmed that the link will be
maintained at HK$ 7.80.
now stand at around 7%.
Interest rates in Hong Kong
12.
in
the rate of
Domestic consumer demand this year has been sluggish as the weaker export performance began to have an effect on the economy.
However, this has not yet produced any measurable rise
unemployment which,
which, at 3.2% for the first half of 1985, showed no change over the figure for the corresponding period for 1984 and which in Hong Kong can be regarded as full employment. The rate of inflation remains low
at about 3.2%. The property and construction markets
have shown clear signs of revival and the return of
confidence among developers following the collapse of
the market three years ago, has resulted in some
favourable land sales. Private sector expenditure building and construction is now forecast
now forecast to grow
to grow by 5% in real terms during 1985 as against a budge forecast increase of only 2%. Although it has since fallen, the
Hang Seng Index (stock exchange) recently reached a
four year high and improved levels of new investment in
the manufacturing sector have been recorded during the
last six months.
Following three years of budget
deficit, the Government expects to return to balanced budgets in 1986.
on
13.
estimated at
million), the
Government revenue in 1985/86 i s
HK$36.2 billion (approximately £3.6
majority of which comes from direct and indirect taxes,
land transactions and payments for Government services.
Government expenditure will be HK$38.4 billion
(approximately £3.8). To cover the deficit of HK$ 2.2
billion, the Financial Secretary intends to use HK$1
billion of fiscal reserves and will raise the
the remaining
HK$1.2 billion from increased revenue. The Hong Kong
Government hopes to
return to balanced budgets in