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WEDNESDAY, MARCH 1, 1978
ON EXPORTS, HE SAID A DETAILED EXAMINATION OF THE PROSPECTS FOR THE GROWTH IN OUR VARIOUS MARKETS IN 1978 WAS UNDERTAKEN FOR THE PURPOSE OF MAKING AN ECONOMETRICALLY BASED FORECAST OF GROWTH
IN TOTAL EXPORTS.
+ALTHOUGH OUR DOMESTIC EXPORTS OF TEXTILES AND CLOTHING WILL BE AFFECTED BY RECENTLY NEGOTIATED QUOTA RESTRICTIONS, ALBEIT PERHAPS LESS SEVERELY IN 1978 THAN LATER ON, THE POSSIBILITY OF FURTHER TRADING-UP REMAINS AND THE PROSPECTS FOR EXPORTS OF GOODS OTHER THAN CLOTHING AND TEXTILES CONTINUE TO BE GOOD. THE FORE- CAST IS, FOR TOTAL EXPORTS TO GROW IN 1978 BY SIX PER CENT.
ON IMPORTS, MR. HADDON-CAVE FORECAST A NINE PER CENT GROWTH, THE EMPHASIS BEING ON CONSUMER GOODS AND CAPITAL GOODS.
ON PRICES, MR. HADDON-CAVE ALSO PREDICTED THAT THE WORLD PRICES FOR PRIMARY PRODUCTS ON THE WHOLE WOULD REMAIN FAIRLY STABLE WITH FOOD PRICES FALLING SLIGHTLY AS A RESULT OF GOOD HARVESTS, AND PRICES FOR RAW MATERIALS AND METALS AND MINERALS RISING SLIGHTLY.
+WORLD PRICES FOR MANUFACTURES ARE FORECAST TO INCREASE BY SIX PER CENT IN 1978.
+ON THE ASSUMPTION THAT THE EXCHANGE VALUE OF THE HONG KONG DOLLAR WILL BE STABLE DURING 1978, EXPECT CONSUMER PRICES GENERALLY TO INCREASE BY ABOUT FIVE PER CENT WITH HIGHER INCREASES FOR HOUSING AND SOME PERSONAL SERVICES. HE SAID.
MR. HADDON-CAVE ALSO POINTED OUT THAT THE PRICE INCREASES OF THE OTHER COMPONENTS OF THE G.D.P. COMBINE WITH THIS FORECAST
INCREASE IN CONSUMER PRICES WOULD GIVE A DEFLATOR OF SEVEN PER CENT IN 1978 - HIGHER THAN THE INCREASE IN CONSUMER PRICES.
HE GAVE TWO REASONS FOR MAKING THIS FORECAST, +FIRSTLY, THE INVESTMENT PRICES WILL BE HIGHER THAN THIS AT 10 PER CENT DUE TO HIGHER BUILDING AND CONSTRUCTION COSTS AND HIGHER IMPORT PRICES FOR CAPITAL GOODS.
+SECONDLY, I EXPECT EXPORT PRICES TO INCREASE SLIGHTLY FASTER (FIVE PER CENT THAN THE INCREASE IN IMPORT PRICES (FOUR PER CENT) PARTLY REFLECTING QUALITY UPGRADING WHICH MAY NOT BE FULLY ACCOUNTED FOR BY OUR QUANTUM INDEXES OF EXPORTS AND PARTLY REFLECTING
INCREASES IN LABOUR COSTS, HE SAID.
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