XN000022-1981-09-11 — Page 2

FRIDAY, SEPTEMBER 11, 1981

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BIGGER THAN EXPECTED SURPLUS FOR HK, FS SAYS

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HONG KONG WILL END THE FINANCIAL YEAR WITH A SURPLUS +WELL IN EXCESS OF THE BUDGETED FIGURE OF $7 800 MILLION, THE FINANCIAL SECRETARY, MR JOHN BREMR IDGE, TOLD MEMBERS OF THE HONG KONG ECONOMIC ASSOCIATION AT A DINNER TONIGHT.

THE HIGHER SURPLUS WOULD RESULT DESPITE, INCREASED EXPENDITURE ON GENERAL REVENUE ACCOUNT. FROM REVENUE COLLECTIONS WHICH, SO FAR THIS YEAR HAVE EXCEEDED EXPECTATIONS, MAINLY BECAUSE OF HIGHER THAN EXPECTED INTEREST TAX, STAMP DUTIES AND LAND SALES.

GROSS DOMESTIC PRODUCT TOO WOULD BE GREATER THAN FORECAST, ATTAINING A FIGURE OF TEN PER CENT GROWTH IN REAL TERMS.

+THIS IS, OF COURSE, A VERY HIGH FIGURE TO ACHIEVE IN THE MIDDLE OF A WORLDWIDE RECESSION - PARTICULARLY FOR AN EXPORT- ORIENTED ECONOMY LIKE HONG KONG, THE FINANCIAL SECRETARY SAID.

IN ADDITION TO THE HIGH LEVEL OF GDP GROWTH, HONG KONG WAS TO BE ENVIED FOR THE LITTLE LONG-TERM UNEMPLOYMENT, CONSIDERABLY INCREASED EXPORTS AND RE-EXPORTS, AND, RESULTING FROM RECENT TIGHTER IMMIGRATION CONTROL, RENEWED GROWTH IN PER CAPITA GDP, HE SAID.

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MR BREMRIDGE CAUTIONED, HOWEVER, THAT WHILE THE AVERAGE SHARE OF INCOME PER HEAD OF THE POPULATION WOULD INCREASE, REAL WAGES WOULD NOT GO UP SO FAST BECAUSE THE LABOUR FORCE WAS

INCREASING SHARPLY BY ABOUT EIGHT PER CENT A YEAR.

BUT REAL WAGES WOULD INCREASE OVERALL, THOUGH MORE IN SOME INDUSTRIES THAN IN OTHERS, HE SAID.

+THUS I HOPE THAT IN THE COURSE OF THE NEXT FEW YEARS THE STANDARD OF LIVING OF THE AVERAGE MAN AND WOMAN IN HONG KONG CAN BE IMPROVED, THOUGH THIS CAN ONLY COME FROM GENERAL ECONOMIC SUCCESS - ITSELF

ITSELF DEPENDENT ON PRUDENT GOVERNMENT AND THE WORK AND ENTERPRISE OF OUR PEOPLE, HE SAID.

MR BREMR IDGE SAID THAT THE ECONOMY WAS CONTINUING TO GROW AT A RAPID RATE - BUT WITH FASTER THAN DESIRABLE INCREASES IN PRICES -- RAISED FROM 12 PER CENT TO 14 PER CENT PARTICULARLY THOSE PRICES THAT AFFECT CONSUMERS, PLUS A WIDENING TRADE DEFICIT.

THIS SITUATION WAS EXPECTED TO CONTINUE FOR AT LEAST THE REST OF THE YEAR, BARRING EVENTS OUTSIDE HONG KONG'S CONTROL — AND THERE WAS NO WAY HONG KONG COULD INFLUENCE THE COURSE OF INTEREST RATES IN THE UNITED STATES.

/HE SAID