8
18.
As demand slackened, the forecast
growth rate in real terms of imports was lowered
to around 11%.
Invisible trade was also
expected to grow more slowly, reflecting in part
a more moderate demand for trade-related
services and in part a reduction in tourist
spending. Both exports and imports of services
were thus forecast to grow by 5% in real terms.
19.
In the domestic sector, the forecast
growth rate in real terms of government
consumption expenditure remained at 6%, while
those of private consumption expenditure and of
gross domestic fixed capital formation were
lowered to 3.5% and 3.4% respectively. Within
the latter component, the forecast growth rate
in real terms of expenditure on building and
construction was raised to around 4%, mainly due
to a faster growth in public sector
construction; while that of expenditure on plant
and equipment was lowered to 4.7%, reflecting a
more cautious approach towards investment in the
private sector as economic activity slackened.
20.
On inflation, in the light of the
recent price levels it was considered
appropriate to raise slightly the forecast rates