'ECONOMY ADJUSTING WELL'
SIR PHILIP
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HONG KONG'S ECONOMY HAS BEEN ADJUSTING FAVOURABLE IN THE PAST FEW MONTHS, DESPITE EARLIER ANXIETY CAUSED BY DEVELOPMENTS
IN THE SECOND HALF OF 1980 ABOUT OUR IMMEDIATE PROSPECTS, THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE, SAID TODAY (THURSDAY).
AND HE ADDED: +GROWTH WITH STABILITY IN 1981 LOOKS TO ME TO BE NOT IMPOSSIBLE OF ACHIEVEMENT. +
WINDING UP THE BUDGET DEBATE, SIR PHILIP NOTED THAT THE EXPORT SECTOR IS HOLDING UP EXTREMELY WELL IN THE FACE OF GENERALLY UNFAVOURABLE ECONOMIC CONDITIONS IN OUR MAJOR MARKETS.
THE RATE OF INFLATION IS SLOWING DOWN AS EXPECTED, ALTHOUGH NOT AS RAPIDLY AS EVERYONE WOULD WISH, HE SAID, ADDING THAT THE GROWTH RATES OF THE MONETARY AGGREGATES ARE ALSO SLOWING DOWN AND THE EXCHANGE VALUE OF THE HONG KONG DOLLAR HAS BEEN STABLE.
SIR PHILIP SAID THE VALUE OF DOMESTIC EXPORTS IN THE FIRST TWO MONTHS OF THIS YEAR WAS 13 PER CENT HIGHER THAN IN THE FIRST TWO MONTHS OF 1980, SUGGESTING A GROWTH RATE IN REAL TERMS OF FIVE PER CENT.
IT IS TOO EARLY TO DEDUCE CONCLUSIVELY THAT THE GROWTH RATE OF DOMESTIC EXPORTS IS BOTTOMING OUT,+ SIR PHILIP SAID, BUT THE FACT THAT THE GROWTH RATE HAS CEASED TO FALL IS ENCOURAGING.+
AS FURTHER INDICATIONS THAT OUR EXPORT PERFORMANCE COULD BE EXPECTED TO GRADUALLY IMPROVE DURING THE YEAR, SIR PHILIP POINTED TO THE RECENT IMPROVEMENT IN THE GROWTH RATE OF EMPLOYMENT IN THE MANUFACTURING SECTOR AND THE ACCELERATED GROWTH RATE OF RETAINED
IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES.
THE YEAR-ON-YEAR GROWTH RATE OF RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES WAS FIVE PER CENT IN REAL TERMS IN THE FIRST TWO MONTHS OF THIS YEAR, COMPARED WITH MINUS TWO PER CENT IN THE THIRD QUARTER OF 1980 AND FOUR PER CENT IN THE FOURTH QUARTER.
REFERRING TO PRIVATE CONSUMPTION EXPENDITURE, SIR PHILIP SAID THE GROWTH RATE IN THE FIRST TWO MONTHS OF THIS YEAR CONTINUED TO BE RAPID AT 33 PER CENT, WHICH SUGGESTS THAT THE GROWTH RATE OF PRIVATE CONSUMPTION EXPENDITURE HAS REMAINED AT LEAST AS RAPID AS IN 1980.
THE VISIBLE TRADE GAP IN THE FIRST TWO MONTHS OF THIS YEAR HAD WIDENED TO 17 PER CENT, COMPARED WITH 15 PER CENT IN THE FIRST TWO MONTHS OF 1980.
AT THE SAME TIME, THE GROWTH RATES OF THE MONETARY AGGREGATES SEEM TO HAVE BEEN SLOWING DOWN, BUT THE SEASONAL FACTORS INVOLVED ARE SUCH THAT A DEFINITIVE VIEW CANNOT BE TAKEN AT THIS STAGE, HE ADDED.
SIR PHILIP SAID THAT ALTHOUGH THE RATE OF INCREASE IN PRICES IS STILL FAIRLY RAPID, IT SEEMS TO HAVE SLOWED DOWN IN THE FIRST TWO MONTHS OF THIS YEAR.
THE DEPRECIATION