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WEDNESDAY, FEBRUARY 27, 1980
IN HIS PRELIMINARY ESTIMATE OF GDP IN 1979, THE FINANCIAL SECRETARY SAID THAT DESPITE A SURGE IN THE SIZE OF OUR POPULATION, THE GROWTH RATE OF PRIVATE CONSUMPTION EXPENDITURE WAS ONLY 7.7 PER CENT IN 1979 — REPRESENTING A SHARP DECELERATION WHEN COMPARED WITH THE GROWTH RATES IN 1977 AND 1978 OF 17.3 PER CENT AND 18.4 PER CENT RESPECTIVELY.
AT 12.3 PER CENT, THE PRELIMINARY ESTIMATE OF THE GROWTH RATE OF GOVERNMENT CONSUMPTION EXPENDITURE IN 1979 IS HIGHER THAN FORECAST (9 PER CENT) AND IS ABOUT THE SAME AS IN 1977 AND 1978 AT 12.5 PER CENT AND 12.8 PER CENT RESPECTIVELY.
THE GROWTH RATE OF EXPENDITURE ON GROSS DOMESTIC FIXED CAPITAL FORMATION, FORECAST AT 9 PER CENT LAST YEAR, IS ESTIMATED AT AS HIGH AS 23.7 PER CENT FOR 1979 WITH THE DIFFERENCE BEING LARGELY THE RESULT OF HIGHER THAN EXPECTED INVESTMENT IN PLANT AND MACHINERY - 46.3 PER CENT INSTEAD OF 8 PER CENT.
MUCH OF THIS INVESTMENT WAS IN TRANSPORT EQUIPMENT (INCLUDING AIRCRAFT), BUT MANUFACTURERS ALSO EXPANDED THEIR CAPACITY BECAUSE THEY WERE ABLE TO ACQUIRE THE LABOUR THEY NEEDED.
THE PRELIMINARY ESTIMATE OF THE GROWTH RATE OF TOTAL EXPORTS OF GOODS FOR 1979 IS 19.5 PER CENT, MADE UP OF 16.6 PER CENT FOR DOMESTIC EXPORTS AND 28.8 PER CENT FOR RE-EXPORTS. SIR PHILIP SAID THESE GROWTH RATES WERE SIGNIFICANTLY HIGHER THAN HIS FORECAST GROWTH RATE OF 8 PER CENT, 7 PER CENT AND 12 PER CENT RESPECTIVELY.
+THE UPSURGE IN THE RE-EXPORT TRADE, WHICH BEGAN TO GET UNDERWAY IN LATE 1977, WAS SUSTAINED FOR THE SECOND YEAR RUNNING. THIS PROVIDES CONFIRMATION THAT OUR ROLE AS AN ENTREPOT IS NOW A SIGNIFICANT FACTOR IN OUR DEVELOPING AND DIVERSIFYING ECONOMY, + HE SAID.
SIR PHILIP SAID THE PRELIMINARY ESTIMATE OF THE GROWTH RATE OF IMPORTS FOR 1979 AT 15.6 PER CENT WAS ALSO HIGHER THAN HIS FORECAST OF 10 PER CENT BUT THIS WAS A REFLECTION OF THE BETTER THAN EXPECTED EXPORT PERFORMANCE — THE GROWTH RATE OF IMPORTS OF CONSUMER GOODS SLOWED DOWN AS FORECAST, BUT THE GROWTH RATE OF IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES SLOWED DOWN LESS THAN HE EXPECTED, WHILE THE GROWTH RATE OF IMPORTS OF CAPITAL GOODS ACTUALLY ACCELERATED.
HE SAID THAT THE NEW ESTIMATES NOW AVAILABLE ON IMPORTS AND EXPORTS OF SERVICES SUGGESTED THAT, IN 1979, THE SURPLUS ON INVISIBLE TRADE WAS SUBSTANTIALLY LARGER THAN IN 1978 AND WAS ALMOST LARGE ENOUGH TO OFFSET THE DEFICIT ON THE VISIBLE TRADE ACCOUNT.
+SO, TAKING THE VARIOUS COMPONENTS OF EXPENDITURE ON THE GDP TOGETHER, INSTEAD OF MY FORECAST OF 7 PER CENT, THE PRELIMINARY ESTIMATE FOR 1979 IS FOR A GROWTH RATE OF GDP IN 1979 OF 11.5 PER CENT, HE SAID.
/HE ADDED: