THURSDAY, NOVEMBER 15, 1979
ECONOMIC GROWTH WITH STABILITY IS ONE OF GOVERNMENT'S TOP PRIORITY OBJECTIVES – SAYS FS
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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE TODAY (THURSDAY) ASSURED THAT ECONÓMIC GROWTH WITH STABILITY IS ONE OF THE GOVERNMENT'S TOP PRIORITY OBJECTIVES AS IT HAS ALWAYS BEEN AND WILL CONTINUE INTO THE 1980S AND BEYOND.
REPLYING TO POINTS RAISED BY UNOFFICIAL MEMBERS IN THE ANNUAL LEGISLATIVE COUNCIL DEBATE, MR. HADDON-CAVE SAID HE WAS SATISFIED THAT THE ECONOMY IS ADJUSTING IN RESPONSE TO MARKET FORCES AND +WE ARE IN SIGHT OF STABILITY,
HE NOTED THAT THE GROWTH MOMENTUM ACHIEVED IN THE FOUR POST-RECESSION YEARS WHICH HAS INCREASED REAL G.D.P. BY 61 PER CENT SINCE 1975 AND REAL G.D.P. PER CAPITA BY 44 PER CENT, HAS INEVITABLY PUT PRESSURE ON THE INTERNAL PRICE LEVEL.
+UNFORTUNATELY, WE ARE NOW ALSO IMPORTING INFLATION AGAIN1 IMPORT PRICES OF CONSUMER GOODS, FOR EXAMPLE, IN THE FIRST NINE MONTHS OF THIS YEAR WERE 16 PER CENT HIGHER THAN IN THE SAME PERIOD LAST YEAR, WHEREAS THE C.P.I. INCREASED BY 11 PER CENT ONLY.
+ALTHOUGH IT TAKES TIME FOR INCREASES IN IMPORT PRICES TO WORK THEIR WAY THROUGH TO RETAIL PRICES, THE EVIDENCE IS THERE THAT IMPORTED INFLATION IS NOW MORE SIGNIFICANT THAN DOMESTICALLY GENERATED INFLATION AND, UNFORTUNATELY, IMPORTED INFLATION IS CAUSED BY FACTORS BEYOND OUR CONTROL, HE SAID, POINTING OUT THAT THE STRENGTHENING OF THE HONG KONG DOLLAR SINCE END OF JULY BY 7.3 PER CENT IS HELPFUL.
MR. HADDON-CAVE SAID NO MATTER HOW SIGNIFICANT IMPORTED INFLATION MAY PRESENTLY BE, THE TASK OF EASING BACK THE PRESSURE OF DEMAND ON DOMESTIC RESOURCES IS LIKELY TO REMAIN WITH US FOR SOME TIME YET.
+AND, IF THE GROWTH RATE OF EXPORTS EASES OFF NEXT YEAR, WE MUST BE ON OUR GUARD TO ENSURE THAT THE GROWTH RATE OF DOMESTIC DEMAND ALSO EASES OFF IN ORDER TO ENSURE THAT THE COST/PRICE STRUCTURE ADJUSTS APPROPRIATELY.
MR. HADDON-CAVE SAID THE GROWTH RATE OF DOMESTIC EXPORTS IN REAL TERMS ·ACTUALLY ACCELERATED IN THE THIRD QUARTER AND HE REVISED HIS FORECAST FOR THE GROWTH RATE FROM 13 TO 16 PER CENT FOR THE WHOLE YEAR.
THIS PERFORMANCE IS DUE NOT ONLY TO MAGNIFICENT EFFORTS OF OUR MANUFACTURERS AND EXPORTERS, BUT ALSO TO THE DEPRECIATION OF THE HONG KONG DOLLAR IN THE EARLY PART OF THIS YEAR AND THE BUOYANCY OF OVERSEAS DEMAND WHICH HAS FIRMED UP EXPORT PRICES.
ON THE GROWTH RATE OF IMPORTS IN REAL TERMS, HE SAID SO FAR THIS YEAR, IT IS RATHER HIGHER THAN HIS REVISED FORECAST FOR THE YEAR OF 15 PER CENT, BUT THIS IS A REFLECTION OF THE BETTER THAN EXPECTED EXPORT PERFORMANCE.+
/ON THE