FRIDAY, SEPTEMBER 9, 1977
HIGHER GROWTH RATE PREDICTED FOR 1977
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MR. PHILIP HADDON-CAVE THE ACTING CHIEF SECRETARY, THIS EVENING PREDICTED THAT THE TOTAL OUTPUT OF GOODS AND SERVICES (GROSS DOMESTIC PRODUCT) WOULD BE 8 PER CENT IN REAL TERMS -- ONE PERCENTAGE POINT HIGHER THAN HIS ORIGINAL BUDGET FORECAST OF 7 PER CENT.
+BUT THIS YEAR'S GROWTH IS MUCH MORE DEPENDENT ON DOMESTIC ECONOMIC ACTIVITY THAN ON EXPORTS AND THAT WORRIES ME,+ HE SAID.
+THE OPENNESS OF OUR ECONOMY IS INCOMPATIBLE WITH SUCH A SITUATION BEING SUSTAINABLE. IN THE LONG RUN, THE GROWTH RATE OF THE GDP DEPENDS ON THE GROWTH OF EXPORTS.+
HE WAS SPEAKING AT THE ANNUAL FELLOWSHIP DINNER OF THE HONG KONG MANAGEMENT ASSOCIATION ON +THE HONG KONG ECONOMY THE LATER PHASE OF THE RECOVERY.+
REVIEWING THE PRESENT ECONOMIC POSITION AND IMMEDIATE OUTLOOK, MR. HADDON-CAVE SAID THAT DESPITE THE EXCEPTIONALLY LARGE VOLUME OF EXPORTS IN THE SECOND HALF OF 1976, HE EXPECTED THE GROWTH RATE OF 4 PER CENT TO 5 PER CENT COULD BE ACHIEVED FOR THE REST OF THE YEAR.
MR. HADDON-CAVE SAW NO NEED TO CHANGE HIS FORECAST OF GOVERNMENT CONSUMPTION EXPENDITURE GROWTH RATE OF 10 PER CENT. BUT ON PRIVATE CONSUMPTION EXPENDITURE, HE EXPECTED AN INCREASE OF 12 PER CENT IN REAL TERMS.
REVISING HIS FORECAST ON INVESTMENT. MR. HADDON-CAVE EXPECTED AN INCREASE OF 15 PER CENT IN REAL TERMS IN PLANT AND MACHINERY INVESTMENT AS OPPOSED TO THE 12 PER CENT HE PREDICTED EARLIER IN THE BUDGET.
+A PART OF THIS INCREASE CAN BE ATTRIBUTED TO LUMPY AND THEREFORE, UNPREDICTABLE INVESTMENTS IN THE FIRST HALF OF 1977. A LARGE PROPORTION OF INVESTMENT IN PLANT AND MACHINERY HAS BEEN, AND WILL CONTINUE TO BE FOR A WHILE, ASSOCIATED WITH THE HIGH LEVEL OF ACTIVITY IN THE CONSTRUCTION INDUSTRY, INCLUDING THE MASS TRANSIT RAILWAY PROJECT,+ HE SAID.
TOUCHING ON IMPORTS, MR. HADDON-CAVE SAID THE VOLUME OF IMPORTS WAS NOW EXPECTED TO GROW BY 9 PER CENT IN 1977, SLIGHTLY LESS THAN THE 10 PER CENT HE FORECAST IN HIS BUDGET SPEECH.
/+ THIS