XN000022-1980-09-12 — Page 2

FRIDAY, SEPTEMBER 12, 1980

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10 PER CENT GROWTH IN GDP FORECAST

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THE FINANCIAL SECRETARY, SIR PHILIP HADDON-CAVE, THIS EVENING FORECAST A 10 PER CENT GROWTH RATE IN THIS YEAR'S GROSS DOMESTIC PRODUCT — UP ONE PER CENT OVER HIS BUDGET FORECAST --BUT WARNED THAT CONSUMER PRICES COULD BE EXPECTED TO RISE FASTER THAN ORIGINALLY ANTICIPATED.

THE REVISED FORECASTS WERE AMONG A NUMBER SIR PHILIP PRESENTED IN A SPEECH TO THE HONG KONG SOCIETY OF SECURITY ANALYSTS,

WITH THE IMPORTANT EXCEPTION OF PRICES WHICH WERE NOW INCREASING AT RATES FASTER THAN FORECAST IN THE BUDGET SPEECH, SIR PHILIP SAID THAT GENERALLY SPEAKING THE REVISED FORECAST INDICATES THAT THE ECONOMY IS IN BETTER BALANCE THAN HE ENVISAGED IN HIS BUDGET SPEECH AND IS EXPECTED TO RECORD ANOTHER YEAR OF DOUBLE DIGIT GROWTH.

SIR PHILIP OUTLINED REVISED FORECASTS INt-

TOTAL EXPENDITURE ON GDP

THE REVISED FORECAST FOR THE GROWTH RATE OF GDP IN 1980 IS NOW 10 PER CENT COMPARED WITH THE BUDGET SPEECH FORECAST OF 9 PER CENT AND THE ACHIEVED GROWTH RATE OF 11 PER CENT IN 1979.

IN VIEW OF THE MARGINS OF ERROR ASSOCIATED WITH MACRO- STATISTICAL CALCULATIONS, SIR PHILIP SAID HE USES 10 PER CENT AS A SHORTHAND FOR A RANGE BETWEEN 9 PER CENT AND 11 PER CENT AND AT THIS PERCENTAGE THE REVISED FORECAST OF EXPENDITURE ON THE GDP AT CONSTANT (1973) PRICES IN 1980 BECOMES $61.8 BILLION, WHICH IS VIRTUALLY THE SAME AS THE FIGURE USED IN THE BUDGET SPEECH FORECAST.

PRICES

THE REVISED FORECAST FOR THE RATE OF INCREASE IN CONSUMER PRICES IN 1980 IS NOW 14 PER CENT, RATHER HIGHER THAN THE BUDGET SPEECH FORECAST OF 10 PER CENT AND 12 PER CENT EXPERIENCED IN 1979.

SO AT CURRENT PRICES, THE REVISED FORECAST OF EXPENDITURE ON THE GDP IN 1980 IS $108.6" BILLION, OR ABOUT 25 PER CENT HIGHER THAN THE REVISED PRELIMINARY ESTIMATE FOR 1979.

IN PER CAPITA TERMS, GDP AT CURRENT PRICES IS ABOUT $21 400 REPRESENTING A GROWTH RATE OF 21 PER CENT, COMPARED WITH THE BUDGET SPEECH FORECAST OF 17 PER CENT AND THE ACHIEVED GROWTH RATE OF 19 PER CENT IN 1979.

EXPORTS

SIR PHILIP FORECAST THAT THE GROWTH RATE OF DOMESTIC EXPORTS IN 1980 WOULD REACH 14 PER CENT. THIS COMPARED WITH 7 PER CENT ORIGINALLY FORECAST IN THE BUDGET SPEECH, BUT WAS STILL LOWER THAN THE ACHIEVED GROWTH RATE OF 17 PER CENT ÎN 1979.

WHILE DOMESTIC