WEDNESDAY, FEBRUARY 23, 1983
9
1982 WAS YEAR OF ADJUSTMENT
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LAST YEAR WAS A YEAR OF ADJUSTMENT FOR HONG KONG. AND THE ECONOMY RESPONDED IN VARIOUS WAYS TO THE MOST SEVERE WORLD RECESSION IN 50 YEARS, THE FINANCIAL SECRETARY, THE HON JOHN BREMRIDGE, SAID TODAY.
MOREOVER, HE SAID, DOMESTIC DEVELOPMENTS IN RECENT YEARS HAD BROUGHT ABOUT FURTHER ADJUSTMENTS.
THESE DEVELOPMENTS INCLUDED THE RAPID EXPANSION OF CREDIT, THE SHARP INCREASES AND SUBSEQUENT EVEN SHARPER FALLS IN PROPERTY PRICES, THE FLUCTUATIONS IN INTEREST AND EXCHANGE RATES AND THE GROWING IMPORTANCE OF THE TERTIARY SERVICES SECTORS.
AGAINST THE BACKGROUND OF AN UNEXPECTEDLY POOR FOURTH QUARTER, EVEN THE SHARPLY REVISED GDP GROWTH RATE OF FOUR PER CENT FOR THE CALENDAR YEAR WAS NOT ACHIEVED. THE GROWTH WAS, IN FACT, ONLY 2.4 PER CENT.
THIS RESULT ILLUSTRATED THE DEPENDENCE ON EXPORTS AND THE PARLOUS STATE OF OTHER ECONOMIES WHOSE PERFORMANCE WAS INCREASINGLY DIFFICULT TO FORECAST.
MR BREMRIDGE APOLOGISED FOR GIVING EARLIER OVER-OPTIMISTIC FIGURES, BUT SAID THE DIFFICULTIES OF FORETELLING THE ECONOMIC FUTURE HAD NEVER BEEN SO GREAT. DELIBERATE PESSIMISM WAS NOT GENERALLY A HELPFUL ALTERNATIVE COURSE, HE SAID,
DOMESTIC EXPORTS DECLINED BY THREE PER CENT IN REAL TERMS AS CONSUMER DEMAND IN THE MAJOR EXPORT MARKETS REMAINED DEPRESSED WITH NO SIGN OF THE LONG AWAITED TURN-AROUND.
BECAUSE OF THE DECLINE IN EXPORT DEMAND, ECONOMIC GROWTH CAME LARGELY FROM DOMESTIC DEMAND, WHOSE GROWTH RATE HAD ALSO BEEN SLOWING DOWN RAPIDLY, HE SAID. PRIVATE CONSUMPTION GREW BY ONLY TWO PER CENT.
OVERALL INVESTMENT SHOWED NO CHANGE IN REAL TERMS, AND THE SIX PER CENT DECLINE IN EXPENDITURE ON PLANT AND MACHINERY WAS LARGELY OFFSET BY A TEN PER CENT INCREASE ON BUILDING AND CONSTRUCTION.
PUBLIC SECTOR EXPENDITURE ON CAPITAL WORKS INCREASED SUBSTANTIALLY, AS A RESULT OF THE CONTINUATION OF THE PUBLIC WORKS PROGRAMME, THE HOUSING PROGRAMME AND THE CONSTRUCTION OF THE ISLAND LINE OF THE MASS TRANSIT RAILWAY.
ALSO SIGNIFICANT WAS THE CONTINUED DEPRESSION OF THE PROPERTY MARKET, HE SAID.
/THE GROWTH