THURSDAY, SEPTEMBER 30, 1982
EDP EXPENDITURE
THE REVISED FORECAST OF EXPENDITURE ON THE GDP AT CONSTANT (1973) PRICES IN 1982 IS $73.4 BILLION. WITH A FORECAST INCREASE IN THE GDP DEFLATOR OF 10 PER CENT, THE REVISED FORECAST EXPENDITURE ON THE GDP AT CURRENT PRICES IS $155.9 BILLION.
IN PER CAPITA TERMS 1982 GDP AT CURRENT PRICES IS NOW FORECAST TO BE ABOUT $30 000, REPRESENTING AN ANNUAL GROWTH RATE OF 13 PER CENT IN MONEY TERMS, AND AN INCREASE OF THREE PER CENT IN REAL TERMS. THE LATTER IS REMARKABLE IN THE MIDDLE OF THE WORST RECESSION IN THE WORLD ECONOMY SINCE THE 1930'S, MR BREMRIDGE SAID.
THE FINANCIAL SECRETARY SAID THAT THE IMPLICAT ONS OF THE REVISED GDP FORECAST FOR THE ECONOMY THIS YEAR CAN BE SUMMARISED AS FOLLOWS:
THE PRESSURE OF AGGREGATE DEMAND ON THE GENERAL PRICE LEVEL IS LIKELY TO EASE OFF.
DOMESTIC DEMAND WILL BE THE SOURCE OF GROWTH OF THE ECONOMY IN 1982 RATHER THAN EXPORT DEMAND, THOUGH HE EMPHASISED THAT GROWTH WHICH IS OTHER THAN EXPORT-LED CANNOT BE SUSTAINED FOR LONG.
AS A RESULT OF THE UPWARD REVISION TO THE EXPENDITURE ON CONSOLIDATED ACCOUNT AND THE DOWNWARD REVISION TO THE GDP FORECAST FOR 1982, THE RELATIVE SIZE OF THE PUBLIC SECTOR WILL INCREASE TO JUST OVER 25 PER CENT AS COMPARED WITH THE BUDGET ESTIMATE OF JUST BELOW 24 PER CENT. THE PUBLIC SECTOR WILL THUS COMMAND AN INCREASED SHARE OF AVAILABLE RESOURCES IN THE ECONOMY. THIS CAN BE ACCEPTED ONLY AS A SHORT-TERM PHENOMENON, BECAUSE IT IS STILL THE FIRM MEDIUM AND LONG-TERM OBJECTIVE OF THE GOVERNMENT TO RESTRAIN PUBLIC SPENDING SO AS NOT TO FRUSTRATE THE DEMAND FOR RESOURCES FROM THE PRIVATE SECTOR.
MR BREMRIDGE SAID THE PUBLIC SECTOR'S SHARE OF BUILDING AND CONSTRUCTION OUTPUT WILL ALSO INCREASE FURTHER FROM 43 PER CENT IN 1981 TO 49 PER CENT IN 1982.
+AS THERE APPEARS TO BE SPARE CAPACITY IN THE BUILDING AND CONSTRUCTION INDUSTRY, I DO NOT EXPECT THE INCREASE IN THE PUBLIC SECTOR'S SHARE IN EXPENDITURE TO HAVE A CROWDING OUT EFFECT ON PRIVATE SECTOR ACTIVITY.
+THERE WILL BE A NARROWING OF THE VISIBLE TRADE GAP FROM 11.7 PER CENT IN 1981 TO 10.7 PER CENT IN 1982,
A SMALL NARROWING IN THE COMBINED GAP ON THE VISIBLE AND INVISIBLE TRADE ACCOUNT IS ALSO ENVISAGED.
MR BREMRIDGE SAID THAT DURING THE YEAR, VARIOUS FURTHER STEPS HAD BEEN TAKEN TO ENCOURAGE THE DEVELOPMENT OF HONG KONG AS THE WORLD'S THIRD LARGEST INTERNATIONAL FINANCIAL CENTRE.
THU'S BUSINESS