XN000022-1980-02-27 — Page 10

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WEDNESDAY, FEBRUARY 27, 1980

HK ECONOMY MOVING TOWARDS INTERNAL AND EXTERNAL EQUILIBRIUM

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THE FINANCIAL SECRETARY, THE HON SIR PHILIP HADDON-CAVE SAID THE PRESENT FORECAST OF ECONOMIC GROWTH IN 1980 SUGGESTS THAT THE MOVEMENT TOWARDS INTERNAL AND EXTERNAL EQUILIBRIUM WHICH BEGAN TO BECOME APPARENT IN THE SECOND HALF OF 1979, WILL NOT BE REVERSED.

HE GAVE THE INDICATIONS LEADING TO THIS TREND AS FOLLOWS:

*

*

*

THE GROWTH RATE OF TOTAL FINAL DEMAND IN 1980

AT 10 PER CENT WILL ONLY BE MARGINALLY HIGHER THAN THAT OF GDP AT NINE PER CENT-

GROWTH RATE OF DOMESTIC DEMAND AT 11 PER CENT WILL BE HIGHER THAN THE GROWTH RATE OF DOMESTIC EXPORTS OF GOODS AT SEVEN PER CENT, AND EVEN HIGHER THAN THE GROWTH RATE OF TOTAL EXPORTS AT NINE PER CENT-

THE GROWTH RATE OF PUBLIC SECTOR DEMAND AT 13 PER CENT WILL BE HIGHER THAN THE GROWTH RATE OF PRIVATE SECTOR DEMAND AT 11 PER CENT-

THE PRESSURE OF DEMAND FOR THE OUTPUT OF THE BUILDING AND CONSTRUCTION INDUSTRY WILL STILL BE CONSIDERABLE WITH A FORECAST GROWTH RATE OF TEN PER CENT INCREASE IN THE EXPENDITURE ON BUILDING AND CONSTRUCTION=

* GROWTH RATE OF PRIVATE CONSUMPTION EXPENDITURE AT NINE PER CENT WILL BE LESS THAN MIGHT BE EXPECTED AND THIS IS USEFUL IN THE CONTEXT OF THE IMPACT OF THE RAPID GROWTH RATE OF PUBLIC SECTOR DEMAND-

* GROWTH RATE OF IMPORTS OF GOODS AT 11 PER CENT WILL BE

KIGHER THAN THAT OF TOTAL EXPORTS OF GOODS AT NINE PER CENT=

*

THE VISIBLE TRADE GAP WILL IN 1980 WIDEN TO ABOUT 14 PER CENT FROM 12.1 PER CENT IN 1979 BUT THIS IS LARGELY OFFSET BY THE SURPLUS ON THE INVISIBLE TRADE ACCOUNT, AND

* WITH THE EXCEPTION OF THE BUILDING AND CONSTRUCTION

INDUSTRY, THE DEMAND FOR, AND THE SUPPLY OF, DOMESTIC RESOURCES IN THE ECONOMY, WILL CONTINUE TO MOVE IN THE DIRECTION OF A BETTER BALANCE AS REFLECTED BY SLOWER RATES OF INCREASE OF PRICES.

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