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Mr Kwok said these three forces helped to enhance economic efficiency and the growth potential of economies in the region, and were important to underpinning the medium term prospects for the region.
year.
For Hong Kong, he said, the economy experienced a cyclical slowdown last
While merchandise trade and exports of services actually grew faster in 1995 than in 1994, and domestic investments continued to grow steadily, GDP growth was adversely affected by the weakness in private consumption expenditure.
"However, there are clear signs that the economy is undergoing a gradual cyclical recovery," Mr Kwok continued.
"Growth in consumer spending is bottoming out and there has been a revival in private sector building activity. While growth in merchandise exports slowed down in the first few months of this year, exports of services are expected to have remained strong.
"Overall, the GDP is forecast to grow by 4.8% in 1996 as compared with 4.6% in 1995. Inflation is expected to moderate from 8.7% last year to 7.5%."
Looking forward into 1997, this economic recovery process is expected to continue with GDP growth rising further to 5.2%.
Mr Kwok said business conditions in China were difficult for many Hong Kong investors in the past two years but this was expected to improve gradually in the next two years.
The economic environment globally and in the Pacific region in particular, is also expected to be conducive to steady economic growth in Hong Kong.
The Hong Kong forecast published in PEO also discussed concerns related to the return of sovereignty in 1997.
The report highlights that the structure of the Hong Kong economy remains sound, and the territory has strong foreign exchange and fiscal reserves which would enable the territory to deal with problems that may arise (if there are any) as a result of the 1997 transition.
Furthermore, despite concerns about a possible rise in emigration as the territory moves closer to 1997, Mr Kwok said the estimated number of emigrants actually fell during 1992 to 1995.