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Within total exports, re-exports rose by about 19% in real terms, and domestic exports by about 11% in real terms.
These were significantly faster than the corresponding increases of 14% and 2% in the preceding quarter.
Sustained revival in demand in the major markets, coupled with the depreciation of the Hong Kong dollar leading to enhanced external competitiveness of Hong Kong's exports, had boosted the export performance.
Imports also surged strongly, by about 22% in real terms in the first quarter of 1995 over a year earlier. Apart from the strong growth in re-exports, retained imports also showed a marked increase, by about 26% in real terms in the first quarter.
The visible trade deficit widened to $35.6 billion in the first quarter of 1995, equivalent to 10.9% of the value of imports. The corresponding figures in the same quarter last year were $13.9 billion and 5.4%.
This widening was mainly attributable to the sharp increase in retained imports for production and investment, as well as to a further deterioration in the terms of trade as the prices of imports continued to rise faster than those of exports. Nevertheless, the surplus in invisible trade should still be able to provide a substantial offset to the deficit on the visible trade account.
Domestic demand
Investment spending should have registered a further strong increase in the first quarter of 1995.
Reflecting this, retained imports of capital goods rose by about 41% in real terms in the first quarter. Consumer spending, on the other hand, should have moderated further in the first quarter of 1995.
The growth rate of retained imports of consumer goods decelerated. Concurrently, retail sales grew by only 1% in volume in the first quarter over a year earlier, as compared to a 4% increase in the preceding quarter.
Nevertheless, this sluggish performance could have been affected by the high base of comparison in the first quarter of last year, when the growth rate of retail sales reached 12%.