SUNDAY, FEBURARI 23, 1975
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BUT WITH INCREASES IN THE QUANTITIES OF FUELS AND CAPITAL GOODS IMPORTED AND WITH BOTH IMPORT AND EXPORT PRICES CONTINUING TO RISE RAPIDLY. THE VISIBLE TRADE DEFICIT VIDENED CONSIDERABLY. FOR 1974 AS A WHOLE, THE VISIBLE TRADE DEFICIT WAS A RECORD $4,094 MILLION,
HOWEVER, THE TERMS OF TRADE BEGAN TO IMPROVE AGAIN IN THE THIRD QUARTER OF THE YEAR WITH EXPORT PRICES INCREASING VERY SLIGHTLY OVER THOSE FOR THE SECOND QUARTER AND WITH IMPORT PRICES ACTUALLY DECLINING.
THE REPORT NOTES THAT THE EXTERNAL VALUE OF THE HONG KONG DOLLAR HAS BEEN RELATIVELY STABLE IN RECENT YEARS. IT APPRECIATED, IN TERMS OF THE CURRENCIES OF HONG KONG'S PRINCIPAL TRADING PARTNERS, BY ABOUT 4-1/2 PER CENT IN THE PERIOD FROM THE **SMITHSONIAN' CURRENCY REALIGNMENTS OF DECEMBER 1971 TO THE END
OF 1973 AND BY ADOUT 1-1/2 PER CENT IN 1974.
STILL IN THE MONETARY FIELD, THE REPORT POINTS OUT THAT ADVANCES AND LOANS BY THE LICENSED BANKS TO THE FINANCIAL SECTOR SHOWED LITTLE CHANGE IN 1974, BUT THOSE FOR THE GENERAL PURPOSES OF TRADE AND INDUSTRY CONTINUED TO INCREASE, ALTHOUGH AT A RATHER SLOWER RATE THAN IN 1973 AGAINST THE BACKGROUND OF THE SLOWING- DOWN IN ECONOMIC ACTIVITY AND FURTHER INCREASES IN 1974 IN INTEREST RATES.
AMOUNTS DUE TO BANKS ABROAD IN 1974 INCREASED ON AN EXCEPTIONALLY LARGE SCALE, BY MORE THAN $6,500 MILLION OR NEARLY 75 PER CENT. THIS INCREASE WAS PARTLY ASSOCIATED WITH BALANGES MADE AVAILABLE BY OVERSEAS HEAD OFFICES TO FACILITATE LENDING OPERATIONS IN HONG KONG, BUT IT WAS ALSO ASSOCIATED, MUCH MORE THAN IN THE PAST, WITH ADVANCES AND LOANS MADE OUTSIDE HONG KONG.
TURNING TO THE PROPERTY SECTOR, THE REPORT NOTES THAT THE SLOWING-DOWN OF ECONOMIC ACTIVITY IN 1974 WAS ALSO REFLECTED IN A DECLINE IN THE SECOND HALF OF THE YEAR IN OFFICE RENTS ON THE RENEWAL OF EXISTING TENANCIES AND FOR NEW LETTINGS, AMOUNTING TO EIGHT PER CENT. THIS COMPARES WITH AN INCREASE OF 21 PER CENT IN THE FIRST HALF OF THE YEAR.
THE REPORT SHOWS THAT THE GENERAL CONSUMER PRICE INDEX LEVELLED-OFF IN THE SECOND HALF OF 1974, FOLLOWING PARTICULARLY RAPID INCREASES EARLIER IN THE YEAR AND IN 1973.
OUT-OF-SEASON TROPICAL CYCLONES RESULTED IN INCREASES IN THE INDEX IN OCTOBER AND NOVEMBER, BUT IT DECLINED SHARPLY IN DECEMBER.
NOTE TO EDITORS:
COPIES OF THE BUDGET. ECONOMIC BACKGROUND ARE NOW AVAILABLE FOR COLLECTION FROM THE GIS PRESS ROOM 6/F BEACONSFIELD HOUSE, HONG KONG.
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