3
WEDNESDAY, FEBRUARY 27, 1985
CHINA WAS NOW HONG KONG'S SECOND LARGEST DOMESTIC EXPORT MARKET, THOUGH STILL WELL BEHIND THE U.S. HE PREDICTED THAT ALL ASPECTS OF HK-CHINA TRADE WOULD CONTINUE TO GROW RAPIDLY BUT THAT EXPORTS TO EUROPE WERE LARGELY DEPENDENT ON ECONOMIC PERFORMANCES THERE AND ON THE MAINTAINING OF THE COMPETITIVENESS OF HONG KONG PRODUCTS. THE STRENGTH OF THE U.S. DOLLAR, TO WHICH
TERRITORY THE HK DOLLAR WAS LINKED, AND AN INFLATION RATE IN THE HIGHER THAN THE UNITED KINGDOM OR WEST GERMANY MEANT THAT HONG KONG PRODUCTS BECAME RELATIVELY MORE EXPENSIVE.
+TAKING THE ABOVE FACTORS INTO CONSIDERATION, THE FORECAST OF THE GROWTH RATE OF DOMESTIC EXPORTS IN 1985 IS 11 PER CENT IN REAL TERMS, RATHER LESS THAN THE 17 PER CENT ACHIEVED IN 1984+, SAID THE FINANCIAL SECRETARY. +THIS, COMBINED WITH A FORECAST GROWTH RATE OF RE-EXPORTS OF 30 PER CENT, GIVES A GROWTH FORECAST FOR TOTAL EXPORTS OF 18 PER CENT, COMPARED WITH 22 PER CENT IN 1984. IF ACHIEVED, THIS WILL STILL BE VERY SATISFACTORY.+
+REFLECTING THE REAL INCREASE IN EARNINGS AND INCOMES IN 1984, PRIVATE CONSUMPTION EXPENDITURE IS FORECAST TO SHOW AN INCREASED BUT STILL MODERATE GROWTH RATE OF SEVEN PER CENT IN 1985.
+GOVERNMENT CONSUMPTION EXPENDITURE IS FORECAST TO INCREASE
BY FIVE PER CENT, COMPARED WITH THREE PER CENT IN 1984.
+PRIVATE INVESTMENT EXPENDITURE IS PARTICULARLY DIFFICULT TO ESTIMATE, THE JOINT DECLARATION ON THE FUTURE OF HONG KONG HAS, HOWEVER, REMOVED THE UNCERTAINTY THAT HUNG OVER THE ECONOMY IN THE LAST COUPLE OF YEARS. PRIVATE INVESTMENT IN PLANT AND MACHINERY IS FORECAST TO INCREASE BY 16 PER CENT IN 1985.+
A FOOTNOTE EXPLAINED THAT ALTHOUGH THE FORECAST GROWTH RATE FOR 1985 WAS LESS THAN THAT RECORDED IN 1984, AT 26 PER CENT, MUCH OF THE GROWTH THAT OCCURRED IN 1984 REPRESENTED THE RECOVERY OF THE BACKLOG FROM 1982 AND 1983.
+PRIVATE INVESTMENT IN BUILDING AND CONSTRUCTION IS EXPECTED TO INCREASE BY TWO PER CENT, COMPARED WITH A DECLINE OF 9.5 PER CENT IN 1984. LARGELY DUE TO A REDUCTION IN MTRC CAPITAL EXPENDITURE, PUBLIC SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION IS, HOWEVER, FORECAST TO DECLINE BY EIGHT PER CENT, COMPARED WITH A DECLINE OF FOUR PER CENT IN 1984.
+THESE FORECASTS, WHEN COMBINED WITH THE FORECASTS OF SOME OTHER, SMALLER, COMPONENTS, GIVE A FORECAST GROWTH RATE FOR GROSS DOMESTIC FIXED CAPITAL FORMATION FOR 1985 OF FIVE PER CENT REPRESENTING A SIGNIFICANT IMPROVEMENT COMPARED WITH THE INCREASE CF UNDER ONE PER CENT THAT WAS RECORDED IN 1984.
+THE FORECAST GROWTH RATE OF IMPORTS ASSOCIATED WITH THESE FORECASTS OF FINAL DEMAND IS 18 PER CENT, COMPARED WITH 15 PER CENT RECORDED FOR 1984. NET EXPORTS OF SERVICES ARE FORECAST TO INCREASE BY 15 PER CENT, COMPARED WITH 21 PER CENT IN 1984.
+THESE FORECASTS FOR THE INDIVIDUAL COMPONENTS OF EXPENDITURE, WHEN COMBINED, GIVE A FORECAST GROWTH RATE OF THE GROSS DOMESTIC PRODUCT OF SEVEN PER CENT.
/+IF THEY