13
conservative.
The
revised forecast growth rate is
Government consumption expenditure is expected
6.5%.
to grow by
4%,
somewhat higher than the budget
forecast of 2% but still below the expected growth
rate of GDP. It remains the Government's policy to
keep public expenditure under control.
25.
Judging by the fact that retained imports of
investment in plant and
capital goods fell by 6%,
machinery remained weak in the first half of the
year. I now expect overall investment in plant and
machinery to show no change this year, compared with
the budget forecast
investment in plant and machinery fell in 1985, this
has been identified by some as a cause for concern
But this concern
of a growth of 2%. Given that
y
about Hong Kong's economic future.
is exaggerated.
Let me explain.
26.
The
determinants of investment expenditure
are complex with many factors being relevant, but I
would like to draw your attention to some pointers
which seem to me to be significant.
The small fall in
private plant and machinery investment in 1985
followed a rise of almost 23% in 1984. To put recent
events in perspective, 1984 saw the highest ever level
of private investment in plant and machinery in Hong
Kong, and 1984 and 1985 taken together
taken together represent the
best two consecutive years ever.
/27. Unfortunately