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WEDNESDAY, APRIL 1, 1987
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STRONG ECONOMY PUTS OFF NEED TO REVISE FORECAST
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THE ECONOMY IS PERFORMING WELL AT PRESENT AND CURRENT EVIDENCE DOES NOT CALL FOR ANY REVISION IN THE ECONOMIC FORECAST FOR 1987, THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, SAID TODAY (WEDNESDAY).
WINDING UP THE RESUMED DEBATE ON THE APPROPRIATION BILL 1987 IN THE LEGISLATIVE COUNCIL, MR JACOBS NOTED THAT FIGURES FOR DOMESTIC EXPORTS IN THE FIRST TWO MONTHS OF 1987 INDICATED THAT THE GROWTH MOMENTUM BUILT UP IN THE LATTER PART OF LAST YEAR
HAD CONTINUED.
+THE CURRENT ORDER BOOK POSITIONS OF MANUFACTURERS REMAIN
STRONG.
+THIS AND THE FACT THAT RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES IN THE FOURTH QUARTER OF LAST YEAR WERE STILL BUOYANT, SUGGEST THAT THE MOMENTUM WILL BE SUSTAINED FURTHER INTO THE YEAR, HE SAID.
POINTING OUT THAT HONG KONG WAS STILL DERIVING SOME ADVANTAGE IN TERMS OF THE PRICE COMPETITIVENESS OF ITS PRODUCTS FROM THE DEPRECIATION OF THE U.S. DOLLAR, MR JACOBS SAID THIS FACTOR
HOWEVER, WAS EXPECTED TO HAVE LESS INFLUENCE ON EXPORT GROWTH H IN
THE FUTURE.
THUS, IT WAS POSSIBLE THAT THE GROWTH MOMENTUM OF HONG KONG'S DOMESTIC PRODUCTS COULD SLACKEN, GIVING A RELATIVELY LOWER GROWTH RATE IN THE SECOND HALF OF THIS YEAR THAN IN THE FIRST HALF, HE NOTED.
MR JACOBS SAID HE BELIEVED IT WAS LIKELY THAT IN 1987 WE WOULD SEE GREATER INFLATIONARY PRESSURES THAN IN 1986.
THE RATE OF INFLATION AT THE CONSUMER LEVEL ACCELERATED SOMEWHAT TOWARDS THE END OF LAST YEAR, HE SAID, ADDING THAT THE CONSUMER PRICE INDICES FOR THE FIRST TWO MONTHS OF 1987 SHOWED THAT THIS INFLATIONARY PRESSURE WAS PERSISTING.
+THE UNEMPLOYMENT RATE IN RECENT MONTHS HAS BEEN AT AN ALL TIME LOW, WHILE THE NUMBER OF REPORTED VACANCIES HAS RISEN SHARPLY.
+THIS TIGHT SITUATION IN THE LABOUR MARKET IS LIKELY TO CONTINUE TO EXERT AN UPWARD PRESSURE ON WAGES AND SALARIES,+ HE SAID.
HOWEVER, MR JACOBS POINTED OUT THAT THE MAIN THREATS TO HONG KONG'S CONTINUED GROWTH WERE EXTERNAL, AND CONSIDERABLE EFFORTS HAD BEEN MADE OVER THE PAST FEW MONTHS THROUGH A SERIES OF OVERSEAS VISITS BY THE SECRETARY FOR TRADE AND INDUSTRY TO ARGUE OUR CASE FOR FREE AND OPEN TRADE.
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