46.
Despite the depreciation of the Hong Kong dollar, the rate of inflation has remained low, consumer prices increased by an average of 2.6% in the first ten months of 1986 over the same period last
year,
47.
recent As a result of the improved economic performance in months the forecast growth rate of the gross domestic product (GDP) for 1986 was revised upward from 4.5%, at the time when the budget
5.6% in
for
the 1986/87
mid-September,
conservative.
financial
was year
announced,
to
and
this even
In contrast,
revised
forecast may
prove
in 1985, the estimated growth
to
rate of
be
the GDP was 0.8%
(b)
Investment
48.
Capital investment in Hong Kong is mainly undertaken by the
role of the Hong Kong
The
Government
private sector.
is largely
confined to ensuring the provision of the necessary infrastructure, and the preservation of favourable investment environment within
business enterprises
which private
returns.
In
addition
to
infrastructure,
the
Hong
seek
much providing
Kong Government
can
to
maximise
the
seeks
to
ensure
their
physical
that
adequate support is provided to
provided to investors in the availability of new
of
industrial
and technology
and well-trained a
well-educated
workforce.
49.
After declining in the second half of 1985 and in the first in the half of
of 1986,
1986, retained imports of capital goods picked up third quarter of 1986. Of particular note were the retained imports of industrial machinery for use in the manufacturing sector, which
in real grew by about 23%
terms in the first nine months of 1986,
after a decline of 4% in 1985 as a whole.
50.
sector
In the property market, demand for most types of private property has been strong this year, reflecting a revival of
year, reflecting interest in property investment generally. Following a strong recovery in the property market in 1985, prices and rentals held firm, while trading in property was active.