XN000022-1979-07-04 — Page 6

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WEDNESDAY, JULY 4, 1979

ANNUALISED CONSUMER PRICES INCREASING AT 8-1/2% AND 10-1/2% ****

THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE, SAID THE ANNUALISED CONSUMER PRICES FOR THE CURRENT YEAR ARE INCREASING AT A RATE OF BETWEEN 8-1/2 AND 10-1/2 PER CENT.

THIS DEPENDED ON WHETHER ONE CONSIDERED THE GOVERNMENT'S CONSUMER PRICE INDEXES COVERING EXPENDITURE INCURRED BY THOSE WITH INCOMES UP TO $3,000 PER MONTH OR THE HANG SENG INDEX WHICH COVERS EXPENDITURE BY THOSE WITH INCOMES BETWEEN $3,000 AND $10,000 PER MONTH, MR. HADDON-CAVE SAID IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY), IN ANSWER TO A QUESTION FROM THE HON. HILTON CHEONG-LEEN CONCERNING THE RATE OF INFLATION.

MR. HADDON-CAVE REMINDED THAT IN THE BUDGET SPEECH HE FORECAST THAT THE CONSUMER PRICES WOULD INCREASE BY NINE PER CENT IN 1979 OVER 1978.

REFERRING TO THE INCREASE IN THE GENERAL PRICE LEVEL, MR. HADDON-CAVE SAID HE WAS NOT IN A POSITION TO UPDATE HIS BUDGET FORECAST OF EIGHT PER CENT. BUT ADDED THAT HE WOULD DO SO WHEN HE MADE HIS MID-YEAR REVIEW OF THE STATE OF THE ECONOMY IN TWO MONTHS' TIME.

+MY PRESENT GUESS IS THAT, TAKING ALL RELEVANT FACTORS INTO CONSIDERATION, INCLUDING RECENT EVENTS WHICH I COULD NOT HAVE FORESEEN SIX MONTHS AGO AND WHICH HAVE AFFECTED THE IMPORT PRICES OF SOME RAW MATERIALS AND SEMI-MANUFACTURES, THE BUDGET SPEECH FORECAST OF EIGHT PER CENT IS PROBABLY ON THE LOW SIDE, BUT NOT DRAMATICALLY SO.+

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