10
WEDNESDAY, MARCH 2, 1994
INFLATION MUST BE CONTAINED
THE GOVERNMENT
MUST CONTINUE TO CONTAIN INFLATION
FINANCIAL SECRETARY, RELIEVE ITS IMPACT UPON THOSE HARDEST HIT, THE THE HON SIR HAMISH MACLEOD, SAID TODAY (WEDNESDAY).
AND TO
++
SIR
HAMISH
SAID
"WE NEED
INFLATION TO BE CLEAR ABOUT THE CAUSES OF CONSEQUENCES FOR HONG KONG, AND HONEST ABOUT WHAT WE CAN AND CANNOT DO
IT,
AT THE TO TACKLE
BUDGET 1994/95
LEGISLATIVE COUNCIL.
AND THE
IN
HIS
HE SAID HONG KONG WAS GOOD AT IDENTIFYING ITS PROBLEMS, THEM SQUARELY, AND THEN FINDING SOLUTIONS.
FACING
THE PERSISTENCE OF RELATIVELY HIGH INFLATION IS MOST INTRACTABLE CHALLENGE, HE SAID.
PROBABLY THE
INFLATION.
FOR
"TRUE. LAST YEAR WE ACHIEVED A WELCOME REDUCTION IN BUT IT WILL STILL BE TOO HIGH AT THE 8.5% RATE WE ARE FORECASTING 1994."
THE
HE SAID INFLATION WAS NOT THE RESULT OF OVER-EXPANSION OF PUBLIC SECTOR. THERE WAS NO MAJOR ECONOMY IN THE WORLD WITH A SMALLER PUBLIC SECTOR.
"INFLATION IS NOT IMPORTED, IT IS HOME-GROWN.'
IMPORT PRICES
HAVE INCREASED BY AN ANNUAL AVERAGE ONLY 1% OVER THE PAST FIVE YEARS.
OF AROUND
"INFLATION HAS NOT PRICED US OUT OF WORLD MARKETS. PRICES HAVE INCREASED BY AN ANNUAL AVERAGE OF AROUND ONLY 2% OVER PAST FIVE YEARS.
OUR EXPORT
THE
INFLATION
IS NOT THE RESULT OF THE HONG KONG DOLLAR LINK
WITH
THE U.S. DOLLAR.
THE LINK HAS BROUGHT NECESSARY STABILITY TO THE EXTERNAL OF HONG KONG'S CURRENCY.
VALUE
"BUT [T IS TRUE THAT THE LINK MEANS WE CANNOT USE INTEREST RATES TO CURB INFLATION.
TH
"INFLATION HAS NOT OVERTAKEN WAGES," HE SAID.
20% IN RECREATIONAL,
AVERAGE FAMILY
MEDIAN HOUSEHOLD INCOME HAS RISEN BY A TOTAL OF ABOUT REAL TERMS OVER THE PAST FIVE YEARS. AND OF COURSE, WELFARE, MEDICAL AND EDUCATIONAL SERVICES WHICH THE ENJOYS ARE EITHER HEAVILY SUBSIDISED OR FREE. AND HALF THE POPULATION ENJOYS SUBSIDISED HOUSING.
THE FINANCIAL SECRETARY SAID INFLATION HAD NOT CAUSED THE DISADVANTAGED, THE DISABLED OR THE ELDERLY TO BE LEFT BEHIND BY RISING CONSUMER
MAINTAINING PRICES BECAUSE THE GOVERNMENT WAS COMMITTED THE REAL VALUE OF SOCIAL SECURITY BENEFITS.
TO
/IN PRACTICE