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WEDNESDAY, OCTOBER 11, 1978
+TAKING ALL THESE RELEVANT FACTORS TOGETHER, IT LOOKS AS IF OUR FOREIGN EXCHANGE EARNINGS GENERATED BY EXPORTS WILL CONTINUE TO GROW IN 1979 AT ABOUT THE SAME RATE AS THIS YEAR.
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+PROVIDED ECONOMIC GROWTH, EVEN AT ITS COMPARATIVELY LOW PRESENT RATE, CONTINUES IN OUR MAJOR MARKETS AND GENERALLY SPEAK ING THIS IS WHAT WE EXPECT IT SHOULD GENERATE SUBSTANTIAL FURTHER GROWTH IN HONG KONG, SIR MURRAY SAID.
+HOWEVER, + HE ADDED +THERE IS THE PROBLEM OF THE PRESENT IMBALANCE BETWEEN THE GROWTH RATES OF DOMESTIC DEMAND AND OF IMPORTS ON THE ONE HAND AND OF EXPORTS ON THE OTHER.
+THE NATURAL EFFECT OF THIS SITUATION ON OUR EXCHANGE RATE SHOULD DISCOURAGE IMPORTS AND ENCOURAGE EXPORTS.
+ IF, AS WE EXPECT, THERE IS A BUDGETARY SURPLUS AGAIN THIS YEAR, THIS TOO SHOULD HELP TO RESTRAIN DEMAND, HE SAID.
SIR MURRAY ALSO POINTED OUT THAT DESPITE THE DEMANDS ON RESOURCES BEING MADE BY CONSUMPTION, THE GROWTH OF DOMESTICALLY PRODUCED EXPORTS WILL BE HIGHER IN 1978 THAN IT WAS IN 1977.
HE SAID THERE ARE SEVERAL FACTORS CONTRIBUTING TO IT.
+FIRST A LARGER WORK-FORCE HAS BEEN DEPLOYED THAN WE THOUGHT POSSIBLE.
+SECOND, THE DEPRECIATION OF THE HONG KONG DOLLAR, AT A TIME WHEN WORLD PRICES OF RAW MATERIALS ARE FALLING, HAS MEANT THAT OUR EXPORTS ARE GRADUALLY PROVING MORE COMPETITIVE.
+THIRD THERE HAS BEEN SOME IMPROVEMENT IN DEMAND IN OUR MAJOR MARKETS, THOUGH OUR EXPORTS OF TEXTILES AND CLOTHING ARE BEGINNING TO RUN UP AGAINST THE NEW AND HARSHER QUOTA LIMITS WE WERE FORCED TO ACCEPT LAST YEAR.
REVIEWING THE ECONOMY IN 1977, SIR MURRAY SAID THE GROWTH RATE OF THE GROSS DOMESTIC PRODUCT IN 1977 IS NOW ESTIMATED TO HAVE BEEN ABOUT 11 PER CENT IN REAL TERMS WHICH IS SIGNIFICANTLY ABOVE THE AVERAGE SO FAR IN THE SEVENTIES.
+THE REAL EARNINGS OF THE LABOUR FORCE INCREASED SUBSTANTIALLY AND WORKERS SHARED WELL IN THE BENEFITS OF ECONOMIC GROWTH.
HE SAID THIS UNDOUBTED PROGRESS WAS ACHIEVED AGAINST A LESS HEALTHY BACKGROUND WHOSE MAIN CHARACTERISTIC WAS A MORE RAPID GROWTH IN DOMESTIC DEMAND THAN IN EXPORTS AND A THREAT ON THE INTERNATIONAL FRONT OF A PROGRESSIVE SLIDE INTO PROTECTIONISM.
+THESE WERE OUR TWO MAIN CONCERNS AS THE ECONOMY ENTERED 1978 AND THEY REMAIN TODAY, HE SAID.
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