WEDNESDAY, OCTOBER 1, 1980
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OVERALL INFLATIONARY PRESSURE REDUCING
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THE GOVERNOR, SIR MURRAY MACLEHOSE, SAID TODAY (WEDNESDAY) IN HIS OPENING ADDRESS TO THE LEGISLATIVE COUNCIL THAT THE OVERALL INFLATIONARY PRESSURE IN HONG KONG'S ECONOMY HAD BEEN REDUCING DURING THE YEAR SO FAR.
HE SAID THAT DURING THE YEAR DOMESTICALLY GENERATED INFLATION HAD EASED AND IMPORTED INFLATION WAS DAMPENED TO SOME EXTENT IN THE FIRST HALF OF 1980.
HE NOTED THAT BECAUSE OF THE SUBSTANTIAL INFLATION AT THE BEGINNING OF THE YEAR, THE INDEX OF GENERAL PRICE LEVELS IN 1980 WAS EXPECTED TO AVERAGE ABOUT 14 PER CENT HIGHER THAN IN 1979 INSTEAD OF THE 10 PER CENT FORECAST IN THE BUDGET.
+THIS IS A GENERALLY FAVOURABLE PICTURE, AND IT APPEARS LIKELY THAT THE GROWTH RATE IN REAL TERMS OF THE GROSS DOMESTIC PRODUCT WILL BE SOMEWHAT HIGHER THAN THE BUDGET FORECAST OF NINE PER CENT,
+BUT THE GROWTH RATE OF PER CAPITA GROSS DOMESTIC PRODUCT IN 1980 WILL DEPEND ON THE LEVEL OF IMMIGRATION. IF, AS SEEMS LIKELY, IT IS NOT MUCH LESS THAN LAST YEAR, ONCE MORE THE GDP PER HEAD WILL GROW MUCH MORE SLOWLY THAN THE GDP ITSELF,+ HE SAID.
TURNING TO ECONOMIC PROSPECTS IN THE LAST MONTHS OF 1980 AND INTO 1981, THE GOVERNOR SAID THE GREATEST UNCERTAINTY LAY IN WHETHER THE HIGH GROWTH RATE OF DOMESTIC EXPORTS COULD BE SUSTAINED.
+PERHAPS NOT, AND EXPORT ORDER BOOKS ARE REPORTED TO BE GETTING SHORTER. BUT RECESSION IN OUR EXPORT MARKETS AND DEMAND FOR HONG KONG PRODUCTS OFTEN DO NOT MOVE ON PARALLEL LINES, AND IF THE GROWTH RATES OF IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES ARE ANYTHING TO GO BY, EXPORT PROSPECTS IN THE IMMEDIATE FUTURE ARE MUCH BETTER THAN ONE MIGHT EXPECT FROM THE OTHERWISE POOR PERFORMANCE OF THE ECONOMIES OF OUR MAIN MARKETS.+
BUT HE CAUTIONED THAT WAR IN THE PERSIAN GULF AND THE IMPOSSIBILITY OF ASSESSING AT THIS STAGE WHAT EFFECT IT WOULD HAVE ON OIL SUPPLIES AND PRICES AND THE ECONOMIES OF OUR TRADING PARTNERS, MADE THE FUTURE PARTICULARLY DIFFICULT TO FORECAST AT THIS TIME.
+ IN THE LONGER RUN, WE SHOULD SEE A RECOVERY IN THE WORLD ECONOMY AND I REMAIN CONFIDENT THAT THE STABILITY OF THE HONG KONG ECONOMY WILL ENABLE US TO TAKE FULL BENEFIT FROM THIS, SIR MURRAY SAID.
HE POINTED OUT THAT ALTHOUGH THE LONGER-TERM PROSPECTS FOR GROWTH OF OUR ECONOMY REMAINED GOOD, IMMIGRATION THREATENED IT IN TWO WAYS.
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FIRST, THE DILUTION OF THE LABOUR MARKET WAS REDUCING THE GROWTH OF INDIVIDUAL INCOMES. +THIS IS GROSSLY UNFAIR TO THE INDIVIDUAL WORKER, HE SAID,
/SECOND, THOUGH