FRIDAY, SEPTEMBER 16, 1983
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FOR 1983 AS A WHOLE, HE REVISED THE FORECAST GROWTH RATE OF PRIVATE CONSUMPTION EXPENDITURE IN REAL TERMS FROM THREE PER CENT TO FOUR PER CENT.
LARGELY DUE TO THE CONTINUATION OF THE PUBLIC WORKS PROGRAMME, THE HOUSING PROGRAMME AND THE CONSTRUCTION OF THE ISLAND LINE OF THE MASS TRANSIT RAILWAY, PUBLIC SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION WILL ALSO CONTINUE TO INCREASE, HE SAID.
BUT ON THE NEGATIVE SIDE, PRIVATE-SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION IS NOW EXPECTED TO DECLINE BY 15 PER CENT IN REAL TERMS IN 1983, HE NOTED.
+GIVEN THE DECLINE IN RETAINED IMPORTS OF CAPITAL GOODS IN THE FIRST HALF OF THIS YEAR AND GENERALLY WEAK PRIVATE-SECTOR INVESTMENT INTENTIONS, THE FORECAST GROWTH RATE OF OVERALL EXPENDITURE ON PLANT, MACHINERY AND EQUIPMENT IN ADDITION MUST BE REVISED DOWNWARDS FROM FOUR PER CENT IN REAL TERMS TO ZERO.
+TAKING GROSS DOMESTIC FIXED CAPITAL FORMATION AS A WHOLE, I MUST THEREFORE MAKE A SUBSTANTIAL DOWNWARD ADJUSTMENT TO THE FORECAST GROWTH RATE IN REAL TERMS FROM THE BUDGET FORECAST OF SIX PER CENT TO MINUS ONE PER CENT. THE MAIN REASONS ARE TOO OBVIOUS TO MERIT COMMENT, SIR JOHN SAID.
SIR JOHN SAID THAT AS DOMESTIC DEMAND REMAINS RELATIVELY WEAK, AGGREGATE DEMAND IN THE ECONOMY IS NOT IMPOSING MUCH PRESSURE ON AGGREGATE SUPPLY OF RESOURCES AND HENCE ON THE GENERAL PRICE LEVEL.
+AS A RESULT OF THE LIKELY DOWNWARD REVISION TO THE EXPENDITURE ON CONSOLIDATED ACCOUNT AND THE UPWARD REVISION TO THE GDP FORECAST FOR 1983, THE RELATIVE SIZE OF THE PUBLIC SECTOR SHOULD REDUCE (FOR THE FIRST TIME FOR YEARS) TO ABOUT 23 PER CENT, AS COMPARED WITH MY BUDGET ESTIMATE OF 24.1 PER CENT.
+BUT THE PUBLIC SECTOR'S SHARE OF BUILDING AND CONSTRUCTION OUTPUT WILL INCREASE FROM 50 PER CENT IN 1982 TO 56 PER CENT IN 1983, LARGELY AS A RESULT OF THE SHARP REDUCTION IN PRIVATE-SECTOR BUILDING AND CONSTRUCTION ACTIVITY,+ SIR JOHN SAID.
AS THE GROWTH RATE OF TOTAL EXPORTS WILL EXCEED THAT OF IMPORTS IN VALUE TERMS, THE VISIBLE TRADE GAP WILL NARROW FROM 10.9 PER CENT IN 1982 TO 10.1 PER CENT IN 1983.
AND THERE WILL ALSO BE A NARROWING OF THE COMBINED GAP ON THE VISIBLE AND INVISIBLE TRADE ACCOUNT, HE SAID.
LOOKING INTO 1984, SIR JOHN EXPRESSED CONFIDENCE THAT THE MAINTENANCE OF STEADY AND CONSISTENT GOVERNMENT POLICIES+ WOULD ENSURE THAT HONG KONG WOULD BENEFIT FROM FURTHER IMPROVEMENT IN THE ECONOMIES OF ITS EXPORT MARKETS.
BUT HE ADDED, IF THEY CEASE TO IMPROVE, SO WILL OUR ECONOMY WHICH IS ALMOST ENTIRELY EXPORT BASED.+
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