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Friday, January 27, 1978
5
Our economists are still analysing the performance for trade
and economy generally in 1977, and preparing a forecast for 1978; but they believe that growth in 1977 is likely to have been rather better than we expected at the beginning of the year; and that the outlook for the
economy in 1978 is far from gloomy.
- an
Although our domestic exports in 1977 only increased by about five per cent in real terms, or 7.3% in value terms over 1976 exceptional year economic growth was boosted by buoyant domestic activity. This is a situation unusual for Hong Kong and one that cannot be sustained
indefinitely given the open nature of our economy. opening session of the legislative Council in October 1977, I said that the situation needed watching. But I also said there was no cause for immediate anxiety and that I expected market forces would adjust the economy
Our to its normal export-led situation. This may already be happening.
In my address at the
Although the
export prices stopped rising in the second half of 1976 and have since remained fairly stable. The exchange rate has adjusted downwards against
most currencies other than the U.S. dollar since March 1977. boom in the construction industry shows no signs of slackening, the increase in the import of consumer goods has slowed down, suggesting a reduction in consumer demand; at the same time, there has been a slight improvement in orders for textiles and clothing and in the import of raw materials,
This
is still no more than a trend. Its continuation must depend largely on the state of demand in our major export markets, and our ability to take advantage
of it.
The outlook for demand in our largest market, the United States, is reasonably good for the immediate future, and we expect exports to it to continue
The outlook in Europe to grow, though perhaps at a slower rate than in 1977. varies; for instance while there seems little immediate hope of much improvement in the Federal Republic of Germany, prospects in the United Kingdom are good, So are those in the Middle East and in some other new markets. looks as if there should be a least adequate demand in our major markets,
Overall it
/Trade