FRIDAY, SEPTEMBER 12, 1980
2
WHILE DOMESTIC EXPORTS TO THE UNITED STATES IN THE FIRST HALF OF 1980 RECORDED A GROWTH RATE OF 20 PER CENT COMPARED WITH THE CORRESPONDING PERIOD IN 1979, SIR PHILIP ANTICIPATED A SLOWING DOWN IN THE SECOND HALF OF THIS YEAR. NEVERTHELESS, THE FORECAST GROWTH RATE FOR THE YEAR AS A WHOLE HAD TO BE REVISED UPWARDS TO NO LESS THAN 15 PER CENT.
THE REVISED GROWTH RATE IN DOMESTIC EXPORTS TO GERMANY IS 12 PER CENT, AS AGAINST THE 10 PER CENT FORECAST IN THE BUDGET SPEECH, WHILE THAT FOR THE UNITED KINGDOM IS REVISED DOWNWARDS FROM 6 PER CENT TO 4 PER CENT. AS FOR DOMESTIC EXPORTS TO THE REST OF THE WORLD, THE REVISED GROWTH FORECAST IS 17 PER CENT, SUBSTANTIALLY HIGHER THAN THE BUDGET SPEECH FORECAST OF 9 PER CENT.
FOR RE-EXPORTS, FROM THE GROWTH RATE OF 28 PER CENT IN THE FIRST HALF OF THIS YEAR, COMPARED WITH THE SAME PERIOD LAST YEAR, IT APPEARS THAT A VERY HIGH GROWTH RATE WILL CONTINUE TO BE RECORDED THIS YEAR. AS IN THE PAST TWO YEARS, MUCH OF THIS GROWTH IS ATTRIBUTABLE TO THE RAPID DEVELOPMENT OF CHINA'S FOREIGN TRADE. SIR PHILIP'S REVISED FORECAST FOR THE GROWTH RATE IN 1980 IS 27 PER CENT, ABOUT TWICE THE BUDGET SPEECH FORECAST AND ONLY JUST BELOW THE ACHIEVED GROWTH RATE IN 1979.
SO FOR TOTAL EXPORTS IN 1980 SIR PHILIP NOW FORECASTS A GROWTH RATE OF 17 PER CENT, ABOUT TWICE HIS BUDGET SPEECH FORECAST OF 9 PER CENT AND NOT MUCH BELOW THE ACHIEVED GROWTH RATE OF 20 PER CENT IN 1979.
SIR PHILIP NOTED THAT OUR EXPORT PERFORMANCE LAST AND THIS YEAR, AFTER ALL THE INFLATIONARY PRESSURES GENERATED BY FIVE YEARS OF SUSTAINED ECONOMIC GROWTH, IS AS REMARKABLE AS OUR PERFORMANCE IN 1976 WHEN EXPORTS SURGED BY 28 PER CENT AS WE MOVED OUT OF RECESSION WITH A DEFLATED COST/PRICE STRUCTURE.
+ IT IS A TRIBUTE TO OUR FREE ENTERPRISE ECONOMY AND, OF COURSE, IS A VINDICATION OF THE GOVERNMENT'S NON-INTERVENTIONIST POLICY STANCE ....,+ SIR PHILIP SAID.
IMPORTS
THE GROWTH RATE OF IMPORTS IN 1980 THAT IS CONSISTENT WITH THE REVISED FORECASTS FOR THE OTHER COMPONENTS OF EXPENDITURE ON THE GDP AND WITH DEVELOPMENTS IN THE FIRST HALF OF 1980 BECOMES 17 PER CENT, COMPARED WITH THE BUDGET SPEECH FORECAST OF 11 PER CENT AND THE ACHIEVED GROWTH RATE OF 16 PER CENT IN 1979.
PRIVATE CONSUMPTION EXPENDITURE
SIR PHILIP SAID THE BUDGET SPEECH FORECAST GROWTH RATE OF 9 PER CENT MIGHT BE A LITTLE ON THE HIGH SIDE BECAUSE OF THE CONSTRAINING EFFECT OF HIGHER THAN EXPECTED PRICES. THIS MEANS THAT THE GROWTH RATE WILL BE LESS THAN THAT OF THE GDP FOR THE SECOND YEAR RUNNING, IMPLYING, FOR THE COMMUNITY AS A WHOLE, THAT THE MARGINAL PROPENSITY TO SAVE MAY HAVE INCREASED.
/GOVERNMENT COMUNI LIC.