FRIDAY, SEPTEMBER 16, 1983
DEMAND HAD ALSO BEEN CONSTRAINED BY THE SLOWER GROWTH IN INCOMES AND WEALTH LAST YEAR BECAUSE OF THE RECESSION AND BY THE PREVAILING ANXIETY ABOUT THE POLITICAL FUTURE OF HONG KONG, HE ADDED.
+CONSEQUENTLY, PRICES AND RENTALS FOR COMMERCIAL AND, PARTICULARLY, INDUSTRIAL PROPERTY HAVE NOW FALLEN TO A LEVEL WHICH PLACES HONG KONG IN A HIGHLY COMPETITIVE POSITION IN COMPARISON WITH OTHER BIG CITIES - - PARTICULARLY IN TERMS OF FOREIGN CURRENCY, WHICH SHOULD BE ATTRACTIVE TO FOREIGN AND DOMESTIC INVESTORS, HE SAID.
ON THE EMPLOYMENT SITUATION, SIR JOHN SAID THAT DURING THE PERIOD FROM MAY TO JULY, THE SEASONALLY ADJUSTED UMEMPLOYMENT RATE WAS 3.9 PER CENT AND THE UNDEREMPLOYMENT RATE 1.7 PER CENT, BOTH WELL BELOW THE IR PEAKS RECORDED EARLIER IN THE YEAR.
+THIS IS SIGNIFICANT.
MOREOVER IN HONG KONG AN UNEMPLOYMENT RATE OF ABOUT THREE PER CENT PROBABLY INDICATES EFFECTIVE FULL EMPLOYMENT.
+AS A RESULT, I EXPECT THAT OUR LABOUR FORCE WILL SHORTLY START SHARING THE BENEFITS OF THE EXPORT-LED ECONOMIC RECOVERY IN THE FORM OF HIGHER REAL WAGES AND EARNINGS, HE SAID.
IN THE FIRST SEVEN MONTHS, THE CONSUMER PRICE INDEX (A) ROSE BY 9.3 PER CENT OVER THE SAME PERIOD OF LAST YEAR. SLIGHTLY EXCEEDING HIS FORECAST NINE PER CENT IN HIS BUDGET SPEECH, SIR JOHN SAID.
+BEARING IN MIND THAT, THROUGH ITS EFFECT ON IMPORT PRICES, DEPRECIATION PUSHES UP THE RATE OF INFLATION, THE FALL OF THE HONG KONG DOLLAR SINCE THE BEGINNING OF THIS YEAR HAS HAD AN ADVERSE EFFECT ON THE RATE OF INFLATION AND WILL HAVE A FURTHER ADVERSE EFFECT DURING THE REST OF THE YEAR.
+ IF THE HONG KONG DOLLAR HAD NOT DEPRECIATED IN THE PAST 12 MONTHS - PARTLY DUE TO CONFIDENCE FACTORS -- THE RATE OF INFLATION WOULD HAVE BEEN WELL BELOW THE 11 PER CENT RECORED IN 1982, + HE SAID.
BUT HE ADDED, +LET ME ASSURE MY CRITICS THAT I AM ACUTELY AWARE OF THE BANE OF INFLATION AND RISING COSTS, AND THAT I WILL DO ALL THAT I CAN TO CONTAIN THEM, BUT GOVERNMENT SUBSIDIES ARE NO ANSWER. NOR ARE MEASURES ANTIPATHETIC TO ESSENTIAL NEW INVESTMENT.+
ON GOVERNMENT REVENUE AND EXPENDITURE FOR THE CURRENT FINANCIAL YEAR, SIR JOHN SAID THAT CURRENT INDICATIONS WERE THAT BOTH WOULD BE SOMEWHAT LOWER THAN THE BUDGET FORECASTS, RESULTING IN A DEFICIT BROADLY OF THE ORDER PROVIDED FOR.
IN THE CIRCUMSTANCES, HE STATED, THERE WAS NO NEED TO CONSIDER BORROWING, THOUGH THE GOVERNMENT HAD RECEIVED MANY LOAN OFFERS.
/+I SHALL