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+THIS REPRESENTS A SUBSTANTIAL REDUCTION FROM THE GROWTH RATE OF (MONEY SUPPLY) IN 1978 OF 26 PER CENT WHICH WAS WELL IN EXCESS OF THE GROWTH RATE OF THE GDP IN MONEY TERMS FOR THAT YEAR OF JUST OVER 16 PER CENT,+ MR. HADDON-CAVE SAID.
HE ALSO POINTED OUT THAT ANNUAL ISED GROWTH RATE OF LOANS AND ADVANCES CALCULATED FROM WEEKLY STATISTICS SEEMED TO BE AROUND 40 PER CENT, AN IMPROVEMENT ON THE GROWTH RATE IN 1978 OF OVER 43 PER CENT.
+HOWEVER, HE SAID, THE TREND AT LEAST SEEMS TO BE DOWNWARD AND THE EFFECT OF THE FIVE INCREASES IN LENDING RATES SINCE THE BEGINNING OF THIS YEAR MUST BEGIN TO BITE HARDER SOON.+
MR. HADDON-CAVE EMPHASISED THAT AN OBJECTIVE LOOK AT HONG KONG'S CURRENT ECONOMIC SITUATION SUPPORTED THE MEASURES HE PROPOSED IN THE BUDGET SPEECH TO SLOW DOWN THE GROWTH RATE OF DOMESTIC DEMAND AND SO TO CONTAIN THE INFLATIONARY PRESSURES WHICH HAD BEEN BUILDING UP FOR SOME TIME.
HE ALSO STRESSED THAT THE BANKS WITH WHOM THE EXCHANGE FUND'S BALANCES ARE PLACED WOULD COOPERATE WITH THE GOVERNMENT TO ENSURE THAT THE CREDIT CREATION POTENTIAL OF THESE BALANCES WAS LIMITED IN FUTURE IN THE WAY AND TO THE EXTENT INTENDED.
HK'S BASIC ECONOMIC ELEMENTS AS STRONG AS EVER
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THERE HAS BEEN ENCOURAGING SIGNS THAT THE BASIC ELEMENTS OF HONG KONG'S ECONOMY ARE AS STRONG AS EVER DESPITE A +TURBULENT AND WORRY ING+ TREND OF EVENT OVER THE PAST TWO MONTHS.
THERE HAS ALSO BEEN SIGNS THAT GIVEN THE DETERMINATION, LEADERSHIP AND IMAGINATIVE REMEDIAL MEASURES, IT MIGHT NOT BE TOO DIFFICULT FOR THE LOCAL COMMUNITY TO OVERCOME ITS PRESENT ADVERSITY.
THIS WAS STATED BY THE HON. JAMES M.H. WU WHEN HE SUPPORTED WITH +RESERVATIONS+ THE EXCHANGE FUND (AMENDMENT) BILL 1979 AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
REFERRING TO RECENT TRADE FIGURES FOR THE MONTH OF JANUARY AND FEBRUARY WHICH SHOWED INCREASES OVER THE SIMILAR PERIOD LAST YEAR, MR. WU NOTED THAT THE VALUE OF IMPORTS STOOD AT $11,048 MILLION AND THAT THE TRADE DEFICIT OF MORE THAN $2,000 MILLION WAS +MUCH TOO HIGH FOR OUR COMFORT.+
HE ATTRIBUTED THE FOLLOWING CAUSES TO THE TRADE DEFICIT, IN ADDITION TO EVENTS WHICH DEVELOPED DURING THE LAST TWO YEARS, TO HONG KONG'S DISADVANTAGE:
* GREATLY INCREASED PUBLIC EXPENDITURE PARTICULARLY IN
PUBLIC WORKS PROJECTS.
* HUGE EXPENDITURE IN REAL-ESTATES DEVELOPMENT DUE TO
REAL DEMAND AS WELL AS SPECULATION IN THE PRIVATE SECTOR.
ITOREA SED