XN000022-1978-03-01 — Page 10

WEDNESDAY, MARCH 1, 1978

NINE PER CENT GROWTH IN GDP FORECAST

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THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, TODAY FORECAST A NINE PER CENT GROWTH RATE IN REAL TERMS OF GROSS DOMESTIC PRODUCT FOR 1978 - SAME AS THE TREND GROWTH RATE BETWEEN 1961 AND 1977, BUT HIGHER THAN THE RATE THAT CAN BE EXPECTED TO BE MAINTAINED THROUGH TO THE MID-1980S.

MAKING A FORECAST FOR THE IMMEDIATE PROSPECT FOR HONG KONG'S ECONOMY IN HIS BUDGET SPEECH IN THE LEGISLATIVE COUNCIL TODAY, MR. HADDON-CAVE SAID THE GROWTH RATE OF G.D.P., AT CURRENT PRICES, FOR THE YEAR AHEAD IS ABOUT 17 PER CENT, BRINGING IT TO A VALUE OF $63,500 MILLION.

MR. HADDON-CAVE ALSO GAVE A BREAKDOWN OF THE GROWTH RATE FORECAST IN REAL TERMS BY COMPONENTS OF EXPENDITURE ON G.D.P. FOR THE YEAR AHEAD AS FOLLOWS:

* PRIVATE CONSUMPTION EXPENDITURE

*

*

-

10 PER CENT

-

14 PER CENT

15 PER CENT

GOVERNMENT CONSUMPTION EXPENDITURE

GROSS DOMESTIC FIXED CAPITAL FORMATION

* EXPORTS OF GOODS

-

SIX PER CENT

* IMPORTS OF GOODS NINE PER CENT

—

* EXPORTS LESS IMPORTS OF SERVICE - 10 PER CENT AND

*

STOCKS

—

SIX PER CENT

ON PRIVATE CONSUMPTION EXPENDITURE, HE SAID THE GROWTH RATE FOR 1978 IS ABOVE THE AVERAGE 8.4 PER CENT EXPERIENCED OVER THE PERIOD FROM 1971 TO 1977, BUT HE STRESSED THAT THIS RATE CAN ONLY BE SUSTAINED IN THE MEDIUM AND LONG TERM IF EXPORTS SHOW A CORRESPONDINGLY STRONG GROWTH RATE.

TURNING TO THE GROSS DOMESTIC FIXED CAPITAL FORMATION, MR, HADDON-OAVE SAID THE GROWTH RATE OF INVESTMENT IN TRANSPORT EQUIPMENT AND CONSTRUCTION MACHINERY SHOULD REMAIN HIGH AND HE FORECAST A TEN PER CENT GROWTH RATE OF INVESTMENT IN PLANT AND MACHINERY IN 1978,

HE EXPECTED THAT THE GROWTH RATE OF PRIVATE INVESTMENT EXPENDITURE IN BUILDING AND CONSTRUCTTON IN 1978 WOULD BE LESS THAN THAT IN 1977. THE GROWTH RATE IN PUBLIC SECTOR'S INVESTMENT EXPENDITURE AND MTR CAPITAL WORKS WOULD BE IN THE REGION OF 30 TO 40 PER CENT, RESULTING IN A FURTHER SHIFT IN CONSTRUCTION ACTIVITY IN FAVOUR OF THE PUBLIC SECTOR.

MR. HADDON-CAVE PREDICTED CONSTRUCTION EMPLOYMENT TO GROW BY ABOUT 15 PER CENT AND PRODUCTIVITY BY ABOUT FIVE PER CENT IN 1978, SO THAT THE CAPACITY OF THE BUILDING AND CONSTRUCTION INDUSTRY MAY EXPAND BY ABOUT 20 PER CENT.

/ON EXPORTS,

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