}
20
WEDNESDAY, MAY 25, 1988
THE CONSUMER PRICE INDEX (A)
SHOWED A
YEAR-ON-YEAR RATE OF
6.7 PER CENT IN
INCREASE OF 6.8 PER CENT IN THE FIRST QUARTER OF 1988, COMPARED WITH CORRESONDING RATES OF INCREASE OF 5.6 PER CENT AND THE PREVIOUS TWO QUARTERS.
THE PRESSURE OF DEMAND RELATIVE TO SUPPLY WITHIN THE ECONOMY, THE RAPID MONETARY AND CREDIT EXPANSION DURING 1987, LOW LOCAL INTEREST RATES, THE DEPRECIATION
IN THE HONG KONG DOLLAR
THE RECENT PAST, AND THE RECENT INCREASE IN THE PRICES OF GOODS IMPORTED FROM CHINA ALL CONTRIBUTED TO THE CURRENT RATE OF INFLATION.
OF
BETWEEN THE FIRST QUARTER OF 1987 AND THE FIRST QUARTER 1988, THE CPI(B) AND THE HANG SENG CPI ROSE BY 6.7 PER CENT AND 7.6 PER CENT RESPECTIVELY.
THE FIRST QUARTER ECONOMIC REPORT 1988 UPDATES THE ASSESSMENT OF THE LOCAL ECONOMIC SITUATION WHICH WAS GIVEN IN THE 1987 ECONOMIC BACKGROUND. APART FROM PROVIDING AN OVERALL VIEW, THE REPORT ALSO CONTAINS INDIVIDUAL CHAPTERS ON THE EXTERNAL SECTOR, THE FINANCIAL SECTOR, THE LABOUR SECTOR, ACTIVITY IN SELECTED SECTORS, AND PRICES.
ON THE EXTERNAL SECTOR, THE REPORT NOTES THAT THE YEAR-ON-YEAR GROWTH RATES OF DOMESTIC EXPORTS TO ALL MAJOR MARKETS IN THE FIRST QUARTER OF 1988 WERE SLOWER THAN IN THE FOURTH QUARTER OF 1987.
DOMESTIC EXPORTS TO THE UNITED STATES, IN PARTICULAR,
RECORDED
A 1 PER CENT DECLINE IN REAL TERMS.
DOMESTIC EXPORTS TO CHINA GREW BY ABOUT 20 PER CENT IN REAL TERMS IN THE FIRST QUARTER OF 1988 OVER A YEAR EARLIER.
THIS GROWTH WAS ATTRIBUTABLE PARTLY ΤΟ INCREASED OUTWARD PROCESSING TRADE AND PARTLY TO A GROWTH IN DEMAND FOR IMPORTS FOR USE IN CHINA.
DOMESTIC EXPORTS TO THE UNITED KINGDOM, JAPAN AND THE FEDERAL REPUBLIC OF GERMANY GREW BY ABOUT 17 PER CENT, 16 PER CENT AND 12 PER CENT RESPECTIVELY IN REAL TERMS.
IN THE FIRST QUARTER OF 1988, RE-EXPORTS WERE 40 PER CENT HIGHER IN REAL TERMS THAN IN THE FIRST QUARTER OF 1987, DUE MAINLY ΤΟ A CONTINUED SURGE IN THE RE-EXPORT TRADE WITH CHINA. AS A RESULT, THE SHARE OF RE-EXPORTS IN TOTAL EXPORTS INCREASED TO SLIGHTLY MORE THAN HALF IN THE FIRST QUARTER OF THIS YEAR.
OVER THE SAME PERIOD, IMPORTS GREW BY ABOUT 20 PER CENT IN REAL TERMS, BUT RETAINED IMPORTS ROSE MUCH MORE SLOWLY, AT ONLY ABOUT 4 PER CENT IN REAL TERMS.
THE REPORT