against this caveat. In 1987, I expect domestic exports to grow by about 7%, and re-exports by about 13%. This would give a
forecast growth rate of slightly less than 10% for total
exports, compared with a growth rate for 1986 of about 15%.
17.
7%
18.
Private
consumption expenditure is forecast to grow by
and that of Government by 6%.
Capital investment is expected to grow by just over 9%, with roughly the same growth rates for both the private and the public sectors (7).
19.
Consistent with these forecasts of domestic and
external demand, the growth rate of imports for 1987 is likely.
to be 11%. We are expecting a visible trade deficit of about
$8 billion.
20.
Combining the forecast growth rates of the various components of expenditure gives a forecast growth rate of GDP for 1987 of just over 6%.
21.
I thus expect 1987 to be a year of more balanced growth between domestic and external demand. The employment situation should continue to be good. Demand in the economy is likely to
(7)
The forecast growth rates for the components of capital investment vary. Expenditure on plant and machinery and expenditure on building and construction are forecast to increase by 10.5% and 9.6% respectively, representing an acceleration over their growth rates in 1986. Within the latter component, public sector expenditure on building and construction is forecast to increase by 8.2%, as construction work on such major public works projects as the Route 5 Highway linking Sha Tin with Kwai Chung and the Tuen Mun light rail transit system continues. Private sector expenditure on building and construction is forecast to increase by 10.3%, reflecting a higher level of private sector building activity generally and the intensification of works on the Eastern Harbour Crossing.
6
/remain
1