XN000022-1975-08-27 — Page 4

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WEDNESDAY, AUGUST 27, 1975

BANKS' ADVANCES AND LOANS ALSO INCREASED RAPIDLY. BUT

LARGELY IN THE CATEGORY OF OVERSEAS LENDING. LOANS AND ADVANCES WITHIN HONG KONG GREW MORE SLOWLY THAN IN EARLIER YEARS, REFLECTING SMALLER DEMAND IN THE FACE OF THE RECESSION.

THE REPORT ADDS THAT, GIVEN THE HIGH RATIO OF BANKS' LIQUID ASSETS TO DEPOSITS - 48 PER CENT IN JUNE

- 48 PER CENT IN JUNE THERE IS SCOPE FOR THE BANKS TO INCREASE THEIR LENDING IN HONG KONG AS AND WHEN DEMAND FOR ADVANCES AND LOANS PICKS UP.

IT POINTS OUT THAT THE EXTERNAL VALUE OF THE HONG KONG DOLLAR, IN TERMS OF A TRADE-WEIGHTED AVERAGE OF OTHER CURRENCIES, IN THE SECOND QUARTER OF THIS YEAR, WAS AT VIRTUALLY THE SAME LEVEL AS IN THE FIRST HALF OF 1974.

AS A RESULT OF THE DOWNTURN IN ECONOMIC ACTIVITY. TOTAL GROSS DOMESTIC PRODUCT, IN CONSTANT PRICE TERMS, SHOWED NO GROWTH IN 1974.

COMMENTING ON THE REPORT, A GOVERNMENT SPOKESMAN SAID THAT THE GENERAL REACTION OF THE ECONOMY TO THE WORLD RECESSION HAS BEEN A LEVELLING-OFF, OR A REDUCTION, IN COSTS AND THE EXTENT OF THIS HAS BEEN SUCH THAT HONG KONG'S EXTERNAL COMPETITIVE POSITION HAS BEEN ENHANCED.

+IT IS ENCOURAGING TO SEE+ HE SAID, THAT THE HONG KONG ECONOMY IS SHOWING ITS USUAL ABILITY TO ADJUST TO EXTERNAL EVENTS.+

THE HALF-YEARLY. ECONOMIC REPORT DATED AUGUST, WHICH REPLACES THEQUARTERLY ECONOMIC REPORTS PUBLISHED IN 1974, WILL BE AVAILABLE SHORTLY FROM THE GOVERNMENT PUBLICATIONS CENTRE.

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