WEDNESDAY, MARCH 1, 1989
5
MR JACOBS SAID HONG KONG
CONTINUED CONSTRAINTS, BUT HE EXPECTED DOMESTIC EXPORTS TO CENT AND RE-EXPORTS BY 22 PER CENT THIS YEAR.
TO FACE CAPACITY RISE BY SEVEN PER
"TRADE IN SERVICES SHOULD CONTINUE TO CONTRIBUTE TO ECONOMIC GROWTH, HE SAID.
"
DOMESTIC EXPORTS TO THE UNITED STATES, HE SAID, SOMEWHAT, BUT THOSE TO THE FEDERAL REPUBLIC OF GERMANY TO REMAIN SLUGGISH.
MR JACOBS
SIGNIFICANTLY
MIGHT PICK UP WERE EXPECTED
POINTED OUT THAT RE-EXPORTS SHOULD CONTINUE TO INCREASE, PARTLY BECAUSE OF THE EXPANSION OF OUTWARD PROCESSING ACTIVITIES AND PARTLY BECAUSE OF THE FAST GROWTH IN INDIRECT TRADE BETWEEN CHINA AND SOME OF THE OTHER INDUSTRIALISING ECONOMIES IN THE REGION.
SAID.
THERE WERE IMPLICATIONS TO HIS SIX PER CENT GDP FORECAST, HE
DEMAND
"FIRST, AS IN 1988, A FAIRLY CLOSE BALANCE IS EXPECTED TO BE
5.9 MAINTAINED BETWEEN THE GROWTH RATES OF DOMESTIC
(AT
PER CENT IS CLOSE TO THAT OF DOMESTIC EXPORTS AT SEVEN PER CENT) AND EXTERNAL DEMAND.
THE
"HOWEVER, GIVEN THE PRESSURE OF DEMAND ON THE ECONOMY AS A
THAT AND WHOLE, IT IS LIKELY THAT MORE IMPORTS WILL BE REQUIRED VISIBLE TRADE DEFICIT WILL INCREASE.
DEMAND
AS AN INDICATION OF THE PRESSURE OF DEMAND, TOTAL FINAL (EXCLUDING RE-EXPORTS) WAS FORECAST TO INCREASE BY 6.9 PER CENT (11.2
HIGHER PER CENT IF RE-EXPORTS ARE INCLUDED), WHICH IS
THAN THE SIX
PER CENT GDP GROWTH RATE.
AS A RESULT, HE PREDICTED A 9.6 PER CENT GROWTH RATE FOR RETAINED IMPORTS (AND OF 15.5 PER CENT FOR TOTAL IMPORTS OF GOODS).
MR JACOBS ALSO EXPECTED THE VISIBLE TRADE DEFICIT TO INCREASE FROM $8.1 BILLION TO $12.6 BILLION.
HE SAID CONSIDERABLE INFLATIONARY PRESSURES STILL EXISTED AND THAT THESE WOULD TEND ΤΟ PUSH THE INFLATION RATE HIGHER BEFORE FALLING, PROBABLY IN THE LATER PART OF THE YEAR.
"THIS YEAR, THE CONSUMER PRICE INDEX (A) IS BY AN AVERAGE OF 8.5 PER CENT, HE SAID.
EXPECTED
TO RISE
THE FORECAST RATE OF INCREASE IN THE GDP DEFLATOR WAS NINE CENT AND THAT OF THE DOMESTIC DEMAND DEFLATOR, 9.3 PER CENT.
INCREASE
IS.
PER
H
OF 'A MUCH FASTER RATE
HOWEVER, EXPECTED FOR BUILDING AND CONSTRUCTION COSTS, AT AN AVERAGE OF AROUND 20 PER CENT, HE SAID.
/MR JACOBS