elderly people in the community is increasing. We have to help the workforce adjust to the changing character of the economy. We have to continue investing in our social and physical infrastructure to secure the territory's future prosperity, and we have to face up to the inflationary pressures which arise from structural change and our shortage of
resources.
8.
I have no doubt that the people of Hong Kong understand that if we are to continue our record of success we must ensure the health of the economy. An open economy, dependent on volatile world markets and its capacity to respond flexibly and promptly to changing circumstances, must avoid mortgaging its future or developing a - monolithic public sector. This means ensuring that the growth of public expenditure remains in step with the rate of economic growth. We cannot achieve all of our objectives at once, but we are fortunate that the success of our economy has meant that each year we are able to devote additional resources to meeting our objectives. Nevertheless, we have to set priorities and make choices. Some of these choices will be difficult.
9.
In framing my Budget proposals, I have taken these issues into account. I have also been concerned to ensure sufficient financial reserves to meet both known contingencies and the future strains and challenges which are an inevitable part of our heavy dependence on external trade and of the complex economic and political transition which Hong Kong has embarked upon.
10. In sum, my aim has been to balance the need to improve our public services with the need to foster growth through enterprise. At the same time, I have sought not to add to inflation nor increase the overall cost of living of ordinary households; and to keep the reserves at a prudent level.
11.
I shall start with a review of Hong Kong's economy and of the problem of inflation. I shall then deal with budgetary strategy and the public finances for the current year and for 1992-93. Finally, I shall present my revenue proposals.
THE ECONOMY
12.
The prospects for economic growth in 1992 look healthy. Our estimate is that GDP will grow this year by 5% in real terms. This year's economic expansion will give Hong Kong a GDP per head of HK$125,000 or US$16,000. At this level, Hong Kong's GDP will be among the highest in Asia, and well ahead of a number of developed economies.
1991 Performance
13.
The promising outlook for 1992 continues the encouraging trend which began to emerge in the latter part of 1990 when our growth rate started to accelerate, and we saw clear evidence of economic revival. In 1991, GDP growth was about 4%, compared with only 3% in 1990.
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