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THE ECONOMY
OVERALL growth of the Hong Kong economy remained modest in 1990, continuing the cyclical slow-down in 1989. This was mainly attributable to more moderate overseas demand for Hong Kong's products and constraints on the supply side following rapid growth during the period 1986 to 1988. While there was an improvement in economic activity in the latter part of 1990, the outbreak of the Gulf crisis in August gave rise to some uncertainty in the economic environment. Moreover, the higher prices of oil products added to the local inflationary pressures.
The performance of domestic exports was weak during most of 1990. Signs of pick-up, however, emerged in the fourth quarter, recording an increase of about six per cent over a year earlier. This was able to offset the decrease in domestic exports by three per cent in the first three quarters of 1990, so that for the year as a whole, domestic exports showed virtually no change in real terms. In 1989, there was zero growth in domestic exports. Re-exports, on the other hand, continued to be robust, with increases in real terms of 10 per cent in the first half and 22 per cent in the second half of 1990. The corresponding growth rate for 1989 as a whole was 19 per cent. Domestic demand, including consumption and investment, improved in the second half of 1990, following a sluggish performance in the first half. Reflecting these developments, the gross domestic product (GDP) grew by 2.4 per cent in real terms in 1990. The corresponding growth rates in 1988 and 1989 were 7.9 per cent and 2.3 per cent./
The labour market remained generally tight during 1990, even though the un- employment and underemployment rates were, on average, marginally higher in 1990 than in 1989. The situation was somewhat tighter in the fourth quarter, when the seasonally adjusted unemployment rate and the underemployment rate were 1.4 per cent and 0.8 per cent respectively. The corresponding figures for the fourth quarter of 1989 were 1.3 per cent and 0.8 per cent.
Labour resources continued to shift from manufacturing to services, in line with the development of Hong Kong into a more service-oriented economy. Reflecting this, employment in the manufacturing sector continued to decrease, while employment in the service sectors showed a further increase in 1990.
Labour incomes continued to rise. Payroll per person engaged in the various major economic sectors rose further both in money terms and in real terms. Taking the first three quarters of 1990 together, the number of vacancies in most sectors was smaller than in the same period in 1989.