7 -
Turning to the second factor of a modest expansion of the workforce, he said without these increases over the last two years, inflationary pressures would have been even more intense as the economy continued to expand.
"The larger workforce should stand us in good stead in our efforts to contain inflation as the economy looks forward to another year of significant growth in 1995."
The workforce increased by 2.9 per cent in 1993 and by 3.5 per cent in 1994.
This is a helpful change compared with the marginal decline in 1992, he said.
Last year's increase of about 100,000 included a number of returning immigrants.
As to the rise on interest rates, the cost of borrowing has gone up, whilst savings have become more attractive.
He said both trends should help to contain inflation by reducing demand.
Inflation for 1995 is forecast to be 8.5 per cent, which Sir Hamish described as an uncomfortably high rate.
End/Wednesday, March 1, 1995
Keep Hong Kong competitive
Hong Kong has to be kept competitive in order to ensure that its economic fundamentals continue to be good, the Financial Secretary, the Hon Sir Hamish Macleod, said in his Budget Speech today (Wednesday) in the Legislative Council.
Additionally, this can be achieved by relying on Hong Kong's traditional strengths and intervening only when necessary.
The Government put its faith in markets. "We believe in small government, and that it is the private sector which generates our wealth," Sir Hamish said.
"Nevertheless, small government does not mean no government.