6
WEDNESDAY, OCTOBER 11, 1978
TEN PER CENT GROWTH IN 1978 GDP EXPECTED
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HONG KONG'S GROSS DOMESTIC PRODUCT FOR 1978 IS EXPECTED TO GROW BY ABOUT 10 PER CENT IN REAL TERMS, AND OUR
FOREIGN EXCHANGE EARNINGS GENERATED BY EXPORTS WILL RISE IN 1979 AT ABOUT THE SAME RATE AS THIS YEAR.
THIS WAS STATED BY THE GOVERNOR, SIR MURRAY MACLEHOSE, IN HIS OPENING ADDRESS TO THE LEGISLATIVE COUNCIL TODAY.
SIR MURRAY SAID ALLOWING FOR SOME SLOWING DOWN IN THE GROWTH OF DOMESTIC DEMAND AND AN INCREASE IN THE GROWTH OF EXPORTS, WE EXPECT THE GROSS DOMESTIC PRODUCT TO GROW BY ABOUT 10 PER CENT IN REAL TERMS -- A VERY SATISFACTORY PERFORMANCE BY ANY STANDARDS.
+COMPETING DEMANDS FROM THE SECTORS CATERING FOR DOMESTIC ACTIVITY AND FOR EXPORTS HAVE RESULTED IN FURTHER RAPID GROWTH IN REAL WAGES AND EARNINGS AND VIRTUALLY NIL UNEMPLOYMENT, HE SAID.
ON THE OUTLOOK FOR 1979, SIR MURRAY SAID PROSPECTS FOR OUR EXPORTS IN 1979 WILL INEVITABLY BE INFLUENCED BY THE RESTRICTIONS ON TEXTILES AND CLOTHING.
+OF COURSE, POSSIBILITIES FOR TRADING UP AND FOR DIVERSIFICATION INTO OTHER INDUSTRIES REMAIN AND I FEEL SURE THAT OUR ENTREPRENEURS AND OUR LABOUR WILL EXERCISE THEIR TRADITIONAL INGENUITY TO MAKE THE BEST OF THE SITUATION,+ SAID SIR MURRAY.
+BUT THE LOW RATES OF GROWTH INCLUDED IN OUR LATEST TEXTILES AGREEMENTS AND THE GREATLY REDUCED PROVISIONS FOR FLEXIBILITY LIMIT THE EXTENT TO WHICH OUR EXPORTERS CAN ADJUST TO CHANGING DEMAND IN OUR MARKETS.+
SIR MURRAY ALSO POINTED OUT THAT THE EXPORT SECTOR IS NOW REASONABLY COMPETITIVE AND WELL POISED FOR MORE RAPID GROWTH AND IT IS HOPED THAT THIS WILL BE FACILITATED BY A FURTHER SLOWDOWN IN DOMESTIC DEMAND IN 1979 THEREBY RELEASING THE NECESSARY RESOURCES.
HE SAID, +RE-EXPORTS ARE TRADITIONALLY HARD TO PREDICT BUT IT WOULD BE PRUDENT TO ASSUME THAT GROWTH WILL BE SLOWER NEXT YEAR THAN THIS.
SIR MURRAY ALSO NOTED THAT THE VIEWS ON DEMAND IN OUR MAJOR EXPORT MARKETS IN 1979 ARE MIXED. IN THE UNITED STATES, THE EMPHASIS APPEARS TO BE ON COUNTERING INFLATION AND MORE CAUTIOUS POLICIES ARE LIKELY TO RESULT.
IN THE FEDERAL REPUBLIC OF GERMANY, WITH A TENDENCY TOWARDS GROWING UNEMPLOYMENT, A LOW INFLATION RATE AND A LARGE TRADE SURPLUS, PRESSURES THERE ARE MOUNTING FOR THE ECONOMY TO BE REFLATED WHILE IN THE UNITED KINGDOM, THE RECOVERY WHICH STARTED IN 1978 SHOULD CONTINUE IN 1979.
/TAKING