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WEDNESDAY, FEBRUARY 25, 1976
MR. HADDON-CAVE SAID THIS WAS A FURTHER INCREASE OVER LAST YEAR'S GROWTH RATE OF NINE PER CENT, BUT BELOW THE VERY RAPID GROWTH BETWEEN 1972 AND 1973.
REFERRING TO INVESTMENT EXPENDITURE, THE FINANCIAL SECRETARY SAID: +CONFIDENCE WITHIN THE PRIVATE SECTOR HAS PROBABLY BEEN RESTORED ALREADY AND THE LOW INTEREST RATES RESULTING FROM THE OVERALL SURPLUS ON OUR BALANCE OF PAYMENTS, AND THE CONSEQUENT LIQUID POSITION OF THE BANK WILL MAKE ANY FINANCIAL CONSTRAINT ON INVESTMENT IN 1976 UNLIKELY.+
FURTHERMORE, HE ADDED, THERE WAS LIKELY TO BE A LARGE INCREASE IN THE DEMAND FOR BUILDING AND CONSTRUCTION INVESTMENT AND THIS WOULD COME FROM BOTH THE PRIVATE AND PUBLIC SECTORS.
THE ACTUAL LEVEL OF INVESTMENT WOULD PROBABLY BE DETERMINED MORE BY CONSIDERATIONS OF SUPPLY THAN ANY LEVEL OF DEMAND AND THE FINANCIAL SECRETARY FORECAST A GROWTH OF 20 PER CENT IN INVESTMENT EXPENDITURE IN 1976.
MR. HADDON-CAVE DESCRIBED EXPENDITURE BY FOREIGN TOURISTS IN HONG KONG AND EXPENDITURE BY HONG KONG RESIDENTS ABROAD AS THE MOST IMPORTANT ELEMENTS IN THE ESTIMATES OF EXPORTS AND IMPORTS OF SERVICE.
WITH THE GRADUAL RECOVERY IN MOST ECONOMIES IN 1976, HE EXPECTED THERE WOULD BE AN INCREASE OF TEN PER CENT IN THE NUMBER OF TOURISTS COMING TO HONG KONG AND AN INCREASE OF THREE PER CENT IN PER CAPITA EXPENDITURE AT CONSTANT PRICES.
THE FINANCIAL SECRETARY SAID: THIS GIVES AN INCREASE OF 13 PER CENT IN TOTAL EXPENDITURE AT CONSTANT PRICES OF FOREIGN TOURISTS IN HONG KONG IN 1976.+
MR. HADDON-CAVE PREDICTED THAT THE EXPENDITURE OF HONG KONG RESIDENTS ABROAD IN 1976 WOULD INCREASE BY ABOUT 16 PER CENT.
+THESE AND OTHER ITEMS PRODUCE A MODEST INCREASE OF FIVE PER CENT IN OUR FAVOUR IN THE DIFFERENCE BETWEEN EXPORTS AND IMPORTS OF SERVICES AT CONSTANT PRICES,+ HE SAID.
+ THE RESULTING NINE PER CENT GROWTH IN THE GDP WILL STILL LEAVE THE ECONOMY WORKING BELOW CAPACITY AND SUCH GROWTH IS NOT THEREFORE, HIGH COMPARED WITH WHAT THE ECONOMY SHOULD BE CAPABLE OF, ALTHOUGH WE SHOULD BE WARY OF TOO RAPID A MOVEMENT TOWARDS FULL CAPACITY WORKING,+ MR. HADDON-CAVE SAID.
THIS, HE ADDED, DID NOT MEAN THERE WOULD BE NO SECTOR NOT WORKING UP TO CAPACITY AND ABOVE IT NOR DID IT MEAN HONG KONG WOULD CONTINUE TO ENJOY THE ALMOST TOTAL ABSENCE OF PRICE INFLATION.
+THERE WILL BE PRESSURE ON THE INTERNAL PRICE LEVEL, MAINLY BECAUSE WE ARE AN OPEN ECONOMY OPERATING WITH WHAT AMOUNTS TO A FIXED EXCHANGE RATE IN A WORLD EXPERIENCING MUCH HIGHER RATES OF PRICE INCREASE,+ THE FINANCIAL SECRETARY SAID.
•WHETHER