11.2.87
20.
SECRET
11
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 remain strong relative to
supply (8).
This, plus the lagged effect of increased
import prices, may give rise to some additional
inflationary pressures. The average rate of increase in
consumer prices is forecast to be about 6%, which is
higher than the corresponding rate of 3.7% in 1986 (9).
The forecast rate of increase in the GDP deflator is about
5.5%.
22.
The forecast growth rate of GDP in money terms.
is about 12% in 1987, implying a current price GDP of
about $330 billion. At current prices, per capita GDP in
1987 should thus be about $58,000, equivalent to US$7,400.
(8)
(9)
The forecast growth rate of total final demand (excluding re-exports), at 7.3%, is higher than that of GDP at 6.2%.
These increases refer to the private consumption expenditure deflator.
SECRET