KAMATATATATARAJATARATALOZJ42525,5PAPAYAOMODOKOTKOWORODNOG
ECONOMIC PROSPECTS FOR 1988.
25.
I shall now say a few words about our economic prospects for the year ahead. Economic forecasting is always difficult; this year it is made even more so by the prevailing climate of uncertainty in the world economy. Subject to this caveat, I expect 1988 to be a year of consolidation, with a more balanced pattern of growth between external and domestic demand.
26.
Nevertheless, the demand for Hong Kong's products in
our major overseas markets remains crucial to Our overall economic performance. In the United States, the likely setback in consumer demand carries with it the expectation of only a
small growth in domestic exports to our largest overseas market. And, looking further ahead, the forthcoming exclusion of our exports from the US Generalised System of Preferences seems likely to affect adversely our economic performance in
1989.
Fortunately, the outlook is brighter for our domestic exports to Japan, the Federal Republic of Germany and the United Kingdom. And notwithstanding continued import controls, the recent growth trend in our domestic exports to China is still strong, although some reduction in growth during the course of this year seems likely as a result of a slower development in outward processing Overall, I forecast an increase in domestic
per cent
per cent exports of 6% Re-exports are
to expected
grow by 128 Together these two forecasts result in a forecast growth rate of
Per cent 98 for total exports.
27.
Domestically, private consumption expenditure is expected to grow more moderately in 1988, although at a higher rate than that of GDP, largely reflecting the recent rapid
growth in incomes. Capital expenditure on building and construction is expected to rise moderately with most of the growth attributable to the private sector. Expenditure on plant and machinery is likewise expected to show only a modest increase, following the substantial growth recorded in 1987.
15
/28. This