THURSDAY, MAY 21, 1981
HONG KONG ECONOMY CONTINUES TO DO WELL
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ACCORDING TO THE FIRST QUARTER ECONOMIC REPORT FOR 1981 PUBLISHED BY THE GOVERNMENT, THE GROWTH RATE OF HONG KONG'S DOMESTIC EXPORTS, WHICH DECLINED DURING 1980, STABILISED IN THE FIRST QUARTER OF THIS YEAR. THE REPORT ALSO ILLUSTRATES THAT THERE WAS A NOTICEABLE IMPROVEMENT IN THE BALANCE BETWEEN THE DEMAND FOR, AND SUPPLY OF DOMESTIC RESOURCES, WHICH HAS MODERATED THE RATE OF INCREASE IN PRICES IN HONG KONG.
THE REPORT ASSESSES PRIMARILY DEVELOPMENTS IN THE FIRST QUARTER OF 1981, USING SUCH STATISTICS AS ARE AVAILABLE, AND UPDATES THE ANALYSES OF 1980 CONTAINED IN THE ECONOMIC BACKGROUND TO THE 1981-82 BUDGET, WHICH WAS PUBLISHED ON BUDGET DAY.
IN A CHAPTER GIVING AN OVERALL VIEW, THE REPORT POINTS OUT THAT THERE WAS A RELATIVE SHIFT IN THE IMPETUS TO ECONOMIC GROWTH FROM DOMESTIC EXPORTS TO DOMESTIC DEMAND DURING 1980 AND THAT THIS SHIFT HAS PROBABLY CONTINUED INTO THE FIRST QUARTER OF 1981.
BUT THE REPORT EMPHASISES THAT THERE WAS NEVERTHELESS A SIGNIFICANT IMPROVEMENT IN THE PERFORMANCE OF DOMESTIC EXPORTS IN THE FIRST QUARTER OF THIS YEAR. AN ACCELERATION IN THE GROWTH RATE OF RETAINED IMPORTS OF RAW MATERIALS AND
SEMI-MANUFACTURES USED BY THE MANUFACTURING SECTOR SUGGESTS THERE ARE FURTHER IMPROVEMENTS AHEAD.
AS REGARDS LAND AND PROPERTY, THE REPORT ARGUES THAT AS A RESULT OF THE SUBSTANTIAL INCREASE IN THE AMOUNT OF LAND SOLD BY THE GOVERNMENT IN 1980, DEMAND PRESSURE FOR LAND AS WELL AS LAND PRICES, APPEARS TO HAVE EASED IN THE FIRST QUARTER OF 1981. THE REPORT FURTHER POINTS OUT THAT THERE WAS A SIGNIFICANT SUPPLY RESPONSE IN THE FIRST QUARTER OF 1981 TO THE HIGH LEVEL OF DEMAND IN THE PROPERTY MARKET.
AS REGARDS THE MONEY SUPPLY, THE GROWTH RATE HAS REMAINDED RAPID AS A RESULT OF AN EVEN MORE RAPID GROWTH RATE IN LOANS AND ADVANCES.
APART FROM GIVING AN OVERALL VIEW, THE REPORT ALSO CONTAINS INDIVIDUAL CHAPTERS ON THE EXTERNAL SECTOR, THE FINANCIAL SECTOR, THE LABOUR SECTOR, ACTIVITY IN SELECTED SECTORS AND PRICES.
ON THE EXTERNAL SECTOR, THE REPORT POINTS OUT THAT THE GROWTH RATE IN REAL TERMS OF DOMESTIC EXPORTS WAS HIGHER IN THE FIRST QUARTER OF 1981 THAN IN THE FOURTH QUARTER OF 1980 AND SO THE SHARP SLOW DOWN IN THE GROWTH RATE OF DOMESTIC EXPORTS IN THE SECOND HALF OF 1980 WAS ARRESTED IN THE FIRST QUARTER OF THIS YEAR. THE REPORT, HOWEVER, CAUTIONS THAT IT IS STILL TOO EARLY TO SAY WHETHER THIS DEVELOPMENT IS THE START OF A NEW TREND. NEVERTHELESS, INDICATIONS THAT IT MAY BE SO ARE THE RECENT MODEST RECOVERY IN THE GROWTH RATE OF RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES AND THE INCREASE IN EMPLOYMENT IN THE MANUFACTURING SECTOR.
THE REPORT