10
FRIDAY, MAY 28, 1993
LOCAL ECONOMY, GIVEN THE ONGOING CAPACITY CONSTRAINTS IN THE THE RAPID
FINAL DEMAND COMPONENTS INCREASES IN SOME OF THE
WILL IMPORTS, CONTINUE TO BE SUPPORTED TO A CONSIDERABLE EXTENT BY GREATER APART FROM THE LOCAL SUPPLY.
INFLATION. IN
THIS 1993 AS A
ON CONSUMER PRICE
THE FIRST FOUR MONTHS OF 1993 THE CPI(A) ROSE BY AN AVERAGE OF 8.5% OVER A YEAR EARLIER. WAS
BELOW THE FORECAST INCREASE OF 9.5% FOR APPRECIABLY WHOLE.
LOOKING AHEAD, THE MARKED STRENGTHENING OF THE JAPANESE YEN AND ΤΟ A THE UPSURGE IN INFLATION IN CHINA IN RECENT MONTHS COULD LEAD FASTER INCREASE IN IMPORT PRICES IN DUE COURSE, WHICH WOULD THEN INTO LOCAL INFLATION.
NEVERTHELESS, THERE ARE A NUMBER OF MITIGATING FACTORS.
FIRST,
WORLD COMMODITY PRICES HAVE REEN GENERALLY SOFT.
FEED
IN THE YEAR SHOULD
SECOND, THE SIGNIFICANT DEPRECIATION OF THE RENMINBI SWAP MARKET OVER THE COURSE OF LAST YEAR AND EARLY THIS HELP TO STABILISE THE PRICES OF IMPORTS FROM CHINA FOR THE TIME BEING.
THE THIRD,
SUSTAINED INVESTMENT IN MACHINERY AND EQUIPMENT SHOULD HELP TO ALLEVIATE SOME OF THE CAPACITY CONSTRAINTS IN THE LOCAL ECONOMY.
FOURTH, THE BUDGETARY MEASURES THIS YEAR IN REGARD TO TAXES SHOULD HAVE VERY LITTLE NET IMPACT ON INFLATION.
INDIRECT
TAKING THESE FACTORS INTO ACCOUNT, THE FORECAST OF AVERAGE RATE 9.5%. OF INCREASE IN THE CPI(A) FOR 1993 AS A WHOLE IS MAINTAINED AT MEANWHILE, THE FORECAST RATE OF INCREASE IN THE GDP DEFLATOR IS KEPT UNCHANGED, AT 9.5%.
AT
ALSO
THE FIRST QUARTER ECONOMIC REPORT 1993 IS NOW ON SALE
PUBLICATIONS CENTRE IN CONNAUGHT PLACE, CENTRAL, AT $42
GOVERNMENT COPY.
THE
A
/THE UPDATED