FRIDAY, NOVEMBER 24, 1989
4
A SLOWDOWN IN HONG KONG'S DOMESTIC EXPORTS TO OVERSEAS MARKETS WOULD BRING ABOUT A CONCURRENT SLACKENING IN THOSE DOMESTIC EXPORTS TO CHINA THAT ARE ASSOCIATED WITH OUTWARD PROCESSING ACTIVITIES.
THE GROWTH RATE IN REAL TERMS OF RE-EXPORTS WAS FORECAST AT 20 PER CENT.
IN THE COMING MONTHS. RE-EXPORTS TO CHINA WOULD CONTINUE TO BE RESTRAINED BY CHINA'S AUSTERITY MEASURES AND BY THE SLACKENING
IN
OUTWARD PROCESSING ACTIVITIES.
ON THE OTHER HAND, THE GROWTH RATE OF RE-EXPORTS OF CHINA ORIGIN WAS EXPECTED TO REMAIN SUBSTANTIAL.
AS DEMAND SLACKENED, THE FORECAST GROWTH RATE IN REAL TERMS OF IMPORTS WAS LOWERED TO AROUND 11 PER CENT.
INVISIBLE TRADE WAS ALSO EXPECTED REFLECTING IN PART A MORE MODERATE DEMAND FOR AND IN PART A REDUCTION IN TOURIST SPENDING.
то GROW MORE SLOWLY, TRADE-RELATED SERVICES
BOTH EXPORTS AND IMPORTS OF SERVICES WERE THUS FORECAST TO GROW BY 5 PER CENT IN REAL TERMS.
IN THE DOMESTIC SECTOR, THE FORECAST GROWTH RATE IN REAL TERMS OF GOVERNMENT CONSUMPTION EXPENDITURE REMAINED AT 6 FER CENT, WHILE THOSE OF PRIVATE CONSUMPTION EXPENDITURE AND OF GROSS DOMESTIC FIXED CAPITAL FORMATION WERE LOWERED TO 3.5 PER CENT AND 3.4 PER CENT RESPECTIVELY.
WITHIN THE LATTER COMPONENT, THE FORECAST GROWTH RATE IN REAL TERMS OF EXPENDITURK ON BUILDING AND CONSTRUCTION WAS RAISED ΤΟ AROUND 4 PER CENT, MAINLY DUE TO A FASTER GROWTH IN PUBLIC SECTOR CONSTRUCTION; WHILE THAT OF EXPENDITURE ON PLANT AND EQUIPMENT WAS LOWERED TO 4.7 PER CENT. REFLECTING A MORE CAUTIOUS APPROACH TOWARDS INVESTMENT IN THE PRIVATE SECTOR AS ECONOMIC ACTIVITY SLACKENED.
ON INFLATION. IN THE LIGHT OF THE RECENT PRICE LEVELS IT WAS CONSIDERED APPROPRIATE TO RAISE SLIGHTLY THE FORECAST RATES OF INCREASE IN THE CPI(A) AND THE GDF DEFLATOR, BOTH TO 10 PER CENT.
DEMAND.
THE PRESSURES ON COSTS AND PRICES ARE EFFECTIVELY RESTRAINING
THE CONSEQUENT SLOWDOWN IN ECONOMIC ACTIVITY SHOULD HELP TO BASE INFLATION IN DUE COURSE.
TABLE.
DETAILS OF THE UPDATED FORECASTS ARE SHOWN IN THE
FOLLOWING
SALE ON
THE THIRD QUARTER ECONOMIC REPORT 1989 WILL BE ON MONDAY NOVEMBER 271 AT THE GOVERNMENT PUBLICATIONS CENTRE IN THE GPO BUILDING, CONNAUGHT PLACE, CENTRAL, AT $20 A COPY.
/FORECAST FOR