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WEDNESDAY, OCTOBER 7, 1987
SOUND ECONOMIC GROWTH, BUT DANGER SIGNS AHEAD
THE GROWTH RATE OF HONG KONG'S GROSS DOMESTIC PRODUCT IN IS EXPECTED TO REACH 12 PER CENT IN REAL TERMS, THE GOVERNOR, DAVID WILSON, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).
THIS WOULD BE EVEN BETTER THAN THE HIGH FIGURE OF 11 CENT ACHIEVED LAST YEAR AND WOULD BE A VERY ENCOURAGING RESULT," SAID.
1987
SIR
PER
HE
HOWEVER, SIR DAVID NOTED THAT THERE WERE SOME DANGER SIGNS TO WHICH HONG KONG MUST BE ALERT, AND ONE OF THESE WAS INFLATION.
ESSENTIAL
BE
HE DESCRIBED A SOUND AND HEALTHY ECONOMY AS THE FOUNDATION ON WHICH ALL OUR OTHER ENDEAVOURS AND ACHIEVEMENTS MUST BASED.
IN
SO FAR THIS YEAR THE ECONOMY HAD DONE BETTER THAN EXPECTED: THE FIRST HALF OF THE YEAR DOMESTIC EXPORTS HAD RISEN BY 27 PER CENT AND RE-EXPORTS BY 49 PER CENT. DOMESTIC DEMAND WAS STRONG IN TERMS BOTH OF CONSUMPTION AND INVESTMENT, AND THE PROPERTY MARKET HAD ACTIVE.
BEEN
"PARTICULARLY WELCOME HAS BEEN THE CONTINUING GROWTH INVESTMENT IN PLANT AND MACHINERY
AN ESSENTIAL PREREQUISITE EXPANDING OUR INDUSTRY AND INCREASING ITS EFFICIENCY, HE SAID.
OF
FOR
INTERNALLY, THE BUOYANCY OF THE ECONOMY HAD LED ΤΟ A SHARP TIGHTENING OF THE LABOUR MARKET; UNEMPLOYMENT HAD FALLEN TO A RECORD LOW OF 1.8 PER CENT AND UNDEREMPLOYMENT TO 1 PER CENT.
"IN THE 12 MONTHS ENDING MARCH 1987, EARNINGS OF WORKERS IN MANUFACTURING AND SERVICE EMPLOYMENT ROSE BY AN AVERAGE OF 12 PER CENT IN MONEY TERMS (OR 7 PER CENT IN REAL TERMS). THERE ARE INDICATIONS THAT THE RATE OF INCREASE HAS ACCELERATED OVER THE LAST SIX MONTHS. OUR WORKERS ARE THUS SHARING IN THE GENERAL PROSPERITY,
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REFERRING TO DANGER SIGNS, THE GOVERNOR SAID THE DEPRECIATION OF THE HONG KONG DOLLAR WAS NOW BEING FELT IN HIGHER IMPORT PRICES, ALTHOUGH RELATIVELY WEAK WORLD COMMODITY PRICES, AND THE HIGH PROPORTION OF OUR IMPORTS WHICH CAME FROM COUNTRIES WHOSE CURRENCIES". HAD ALSO BEEN DEPRECIATING, HAD SO FAR CUSHIONED THIS EFFECT.
"IN ADDITION, RAPID ECONOMIC GROWTH, AND THE RELATIVE SHORTAGE OF LABOUR WHICH NATURALLY FOLLOWS FROM IT. WILL TEND TO PUSH UP PRICES AND DAMPEN OUR CURRENTLY STRONG EXPORT COMPETITIVENESS,' HE SAID.
TT
"AS OF NOW, THE SITUATION IS NOT SERIOUS; BUT IT WILL NEED TO BE WATCHED."
/LOOKING AHEAD,