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11.2.87
7.
I shall now outline the recent and expected
performance of the economy (1). Having set the scene, I
shall then go on to explain the strategy that I see for
the public finances over the next few years and give
estimates of Government's finances in the current year and
for 1987-88.
THE ECONOMY: 1986 EXPERIENCE AND 1987 PROSPECTS
8.
activity.
In 1986 we saw a general revival in economic
Domestic exports have picked up substantially
since last March and achieved a growth rate of about 16%
in real terms for the year as a whole (2). We have been
helped, particularly in our European markets and in Japan,
by the depreciation of the Hong Kong dollar in line with
the US dollar. This strong export performance is in sharp
contrast to the decline of 5% recorded in 1985.
Re-exports also picked up in the second quarter of 1986,
with increased re-exports of goods coming from China. The
growth rate of re-exports for 1986 was about 14% and that
of retained imports about 13%. A virtual balance emerged
on the visible trade account.
(1)
(2)
See '1987 Economic Prospects' for further details.
Unless otherwise indicated, all subsequent growth rate figures are in real terms.
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