Concluding remarks
13.
An increment by one percentage
point in the
CPI (A) due to the higher oil prices will push Hong Kona's
inflation rate at the consumer level up to the 10% mark.
year-on-year
In June, the
rate of increase in the CPI(A)
was 9.1%7 for the first half of 1990 as a whole, the
corresponding increase was 9.3%. As the other factors which
tend to alleviate inflationary pressures are working only
very slowly, the higher oil prices are likely to be a major
factor lifting the inflation rate in the remainder of the
year, although it
will take some time for the full impact
to filter through. As a result. the average rate of
increase in the CPI(A) for 1990 as a whole will probably be
around 9.5%, compared with 8.5% in the Budget forecast
14.
The adverse effect of the Gulf crisis on Hong
Kong's trade and overall economic performance cannot be
readily quantified at this stage. If the crisis continues,
it is likely that any trend of improvement in exports that
was apparent over the recent months will at least proceed
more slowly.
Economic Analysis Division Economic Services Branch Government Secretariat 13 August 1990