FRIDAY, MAY 27, 1994
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THE FORECAST GROWTH RATES IN REAL TERMS OF EXPORTS AND IMPORTS SERVICES IN 1994 ARE BOTH KEPT UNCHANGED, AT 9% AND 8% RESPECTIVELY.
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ALTHOUGH THE GROWTH IN DEMAND FOR TRADE-RELATED SERVICES ARE LIKELY TO
BE SLOWER, IN LINE WITH THE TREND ENVISAGED FOR VISIBLE TRADE, THE GROWTH IN DEMAND IN THE AREAS OF TRAVEL. TOURISM AND VARIOUS BUSINESS SERVICES WILL PROBABLY BE SOMEWHAT FASTER THAN IN THE EARLIER FORECAST.
IN THE DOMESTIC SECTOR, THE FORECAST GROWTH RATE IN REAL TERMS OF PRIVATE CONSUMPTION EXPENDITURE IN 1994 IS KEPT UNCHANGED, AT 7%.
NOTWITHSTANDING ANY POSSIBLE NEGATIVE WEALTH EFFECT THAT MAY HAVE BEEN BROUGHT ABOUT BY CONSOLIDATION IN THE LOCAL STOCK MARKET. THE GROWTH IN CONSUMER SPENDING, AS REFLECTED BY RETAIL SALES IN THE FIRST QUARTER, SUGGESTS A SOLID TREND.
LARGELY OWING TO INCREASED GOVERNMENT PURCHASES OF SUPPLIES AND SUNDRY EQUIPMENT, THE FORECAST GROWTH RATE IN REAL TERMS OF GOVERNMENT CONSUMPTION EXPENDITURE IN 1994 IS RAISED, FROM 3.5% TO 4.4%.
ON INVESTMENT SPENDING, AS WORK ON A NUMBER OF MAJOR PUBLIC SECTOR INFRASTRUCTURAL PROJECTS PROCEEDED APACE, THE FORECAST GROWTH RATE IN REAL TERMS OF PUBLIC SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION IS REVISED UPWARDS, FROM 22% TO 27.5%.
ON THE OTHER HAND, THE FORECAST RATE OF DECLINE IN REAL TERMS IN PRIVATE SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION REMAINS UNCHANGED AT 2%.
TAKEN TOGETHER, OVERALL EXPENDITURE ON BUILDING AND CONSTRUCTION IS EXPECTED TO RISE BY 10.4% IN REAL TERMS IN 1994, FASTER THAN THE INCREASE OF 8.7% IN THE EARLIER FORECAST.
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CONCURRENTLY, THE FORECAST GROWTH RATES IN REAL TERMS OF PUBLIC SECTOR AND PRIVATE SECTOR EXPENDITURES ON MACHINERY AND EQUIPMENT KEPT UNCHANGED, AT 35% AND 5% RESPECTIVELY.
OVERALL EXPENDITURE ON MACHINERY AND EQUIPMENT, WITH AN EXPECTED GROWTH RATE IN REAL TERMS OF 5.8%, IS LARGELY UNCHANGED FROM THE EARLIER FORECAST.
THERE WERE SIGNS THAT THE DECLINE IN RETAINED IMPORTS OF CAPITAL GOODS HAD BOTTOMED OUT IN THE FIRST QUARTER, AND CAPITAL SUBSTITUTION SHOULD CONTINUE TO TAKE PLACE AMIDST THE TIGHT LABOUR MARKET SITUATION.
COMBINING ALL RELEVANT COMPONENTS, THE FORECAST GROWTH RATE IN REAL TERMS OF GROSS DOMESTIC FIXED CAPITAL FORMATION IN 1994 IS RAISED SLIGHTLY, FROM 5.2% TO 5.5%.
OVERALL, THE FORECAST GROWTH RATE IN REAL TERMS OF THE GDP FOR 1994 IS MAINTAINED AT 5.5%.
WHILE THE FORECASTS IN REGARD TO THE MAIN DOMESTIC DEMAND COMPONENTS REMAIN BROADLY ON TRACK, THE SLOWER THAN EXPECTED GROWTH IN EXPORTS IS ENVISAGED TO BE OFFSET BY A CORRESPONDING DECELERATION IN ABSORPTION OF IMPORTS.
/ON INFLATION,