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FRIDAY, AUGUST 25, 1989
ECONOMIC SITUATION IN THE FIRST HALF OF 1989 AND UPDATED FORECASTS OF GDP AND PRICES FOR 1989
OWING TO A DECELERATION IN THE GROWTH RATES OF DOMESTIC EXPORTS AND RE-EXPORTS AND A SLACKENING OF DOMESTIC DEMAND, THE GROWTH MOMENTUM OF THE ECONOMY SLOWED DOWN IN THE FIRST HALF OF 1989.
HOWEVER, THE LABOUR MARKET REMAINED GENERALLY TIGHT, WHILE RATE OF INFLATION ROSE FURTHER.
THE-
THE REPERCUSSIONS OF THE EVENTS IN CHINA CAN BE EXPECTED TO RENFORCE THE TREND OF A SLOW-DOWN IN HONG KONG'S ECONOMIC GROWTH IN THE SHORT TERM.
FEEDBACK FROM BUSINESS SOURCES SUGGESTS THAT TRADE WITH CHINA AND OUTWARD PROCESSING ACTIVITIES ACROSS THE BORDER WERE NOT DISRUPTED TO ANY SIGNIFICANT EXTENT DURING MAY AND JUNE.
HOWEVER, CERTAIN SPECIFIC SECTORS SUCH AS PROPERTY AND TOURISM HAVE BEEN HIT. ADVERSE IMPACT HAS ALSO BEEN FELT IN VARYING DEGREES ON THE LEVEL OF CONSUMPTION AND INVESTMENT.
WHILE THE FULL EFFECT ON THE ECONOMY AT LARGE WILL PROBABLY TAKE MORE TIME TO FILTER THROUGH. THERE HAS NONETHELESS BEEN SOME IMPROVEMENT LATELY.
AN ANALYSIS OF DEVELOPMENTS DURING THE FIRST HALF OF YEAR IS GIVEN IN THE HALF-YEARLY ECONOMIC REPORT 1989 PUBLISHED (FRIDAY).
THIS TODAY
BASIS
THE GOVERNMENT ECONOMIST, MR K.Y. TANG SAID THAT ON THE OF THIS REPORT AND OTHER RECENT INFORMATION, A REVIEW HAD BEEN MADE OF THE FORECASTS OF THE GROSS DOMESTIC PRODUCT (GDP) AND OF PRICE TRENDS FOR 1989.
"THIS REVIEW IS THE SECOND IN A SERIES UNDER WHICH THE SHORT- TERM ECONOMIC FORECASTS ARE TO BE UPDATED AT QUARTERLY INTERVALS,
++ HE SAID.
THE FIRST REVIEW WAS CARRIED OUT IN THE LATTER PART OF MAY. THE FINANCIAL SECRETARY REFERRED то THIS NEW APPROACH IN HIS CONCLUDING SPEECH IN THE BUDGET DEBATE.
RELEASE OF THE UPDATED FORECASTS IS INTENDED TO COINCIDE WITH THE PUBLICATION OF THE QUARTERLY ECONOMIC REPORTS.
THE MAIN UPDATED FORECASTS ARE: AROUND FIVE PER CENT FOR THE GROWTH RATE IN REAL TERMS OF THE GDP, AND 9.5 PER CENT FOR THE RATES OF INCREASE IN BOTH THE GDP DEFLATOR AND THE CONSUMER PRICE INDEX (A).
IN THE FIRST HALF OF 1989. THE GROWTH RATE OF DOMESTIC EXPORTS SLOWED DOWN MARKEDLY, TO ABOUT FOUR PER CENT IN REAL TERMS OVER A YEAR EARLIER. THIS COMPARES WITH AN INCREASE OF NINE PER CENT IN 1988 OVER. 1987.
/DOMESTIC EXPORTS