XN000022-1981-10-07 — Page 7

WEDNESDAY, OCTOBER 7, 1981

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+BUT IN TERMS OF HONG KONG'S OVERALL TRADE POSITION, THE VISIBLE TRADE ACCOUNT CONTINUES TO SHOW A FAIR DEGREE OF STABILITY, WITH THE VISIBLE TRADE 'GAP' HAVING WIDENED ONLY SLIGHTLY IN PERCENTAGE TERMS.+

THE RELATIVE STABILITY IN THE ECONOMY WAS ALSO EVIDENCED BY THERE BEING NO OBVIOUS IMBALANCE BETWEEN THE DEMAND FOR AND THE SUPPLY OF DOMESTIC RESOURCES WITH THE OBVIOUS EXCEPTION OF HOUSING AND LAND, SIR MURRAY ADDED.

ON THE LABOUR FRONT, SIR MURRAY SAID IN MARCH THIS YEAR 2 365 000 PEOPLE WERE EMPLOYED IN HONG KONG, 162 000 MORE THAN IN MARCH LAST YEAR.

BUT IN SPITE OF THIS STRONG INCREASE IN DEMAND FOR LABOUR, THE GROWTH OF SUPPLY CONTINUED TO BE RATHER TOO RAPID FOR THE ECONOMY TO ABSORB, AND THERE WAS A FURTHER INCREASE IN THE UNEMPLOYMENT RATE TO 4.1 PER CENT BY MARCH THIS YEAR.

SIR MURRAY SAID THERE WERE ALSO SIGNS OF EASING IN THE PROPERTY MARKET AND OF A FALL-BACK IN PRICES.

CN THE ONE HAND, DEMAND WAS BEING DAMPENED BY HIGH PRICES AND INTEREST RATES. ON THE OTHER HAND, SUPPLY, PARTICULARLY OF COMMERCIAL PROPERTY, WAS NOW MEETING THE PREVIOUS EXCESS DEMAND.

LAND PRICES, THE GOVERNOR SAID, HAD SIMILARLY BEGUN TO EASE IN MOST AREAS, TO THE EXTENT THAT THE FORMER PRICE LEVELS IN THE PROPERTY MARKET WERE DUE TO SPECULATION.

CN DOMESTICALLY GENERATED INFLATION, SIR MURRAY SAID IT APPEARED TO HAVE MODERATED IN 1981 WITH THE GROSS DOMESTIC PRODUCT DEFLATOR NOW RUNNING AT ABOUT TEN PER CENT PER ANNUM, BUT THE RATE OF INCREASE IN CONSUMER PRICES, AT ABOUT 14 PER CENT PER ANNUM HAD CONTINUED TO BE RAPID.

THIS, HE SAID, WAS ATTRIBUTABLE TO INCREASES IN WORLD PRICES AND TO THE DEPRECIATION OF THE HONG KONG DOLLAR.

+ IT IS UNDOUBTEDLY A SERIOUS MATTER FOR OUR PEOPLE, SIR

MURRAY SAID.

+EVEN THOUGH, ON AVERAGE, MONEY INCOMES HAVE BEEN INCREASING AT AN EVEN MORE RAP RATE AND EVEN THOUGH EMPLOYMENT IS RELATIVELY FULL, AND THAT IN THESE RESPECTS THERE HAS GENERALLY BEEN IMPROVEMENT OVER 198, THERE ARE STILL SECTORS IN WHICH REAL INCOMES ARE STATIC OR HAVE FALLEN, AND MANY MORE IN WHICH THE RATE OF INCREASE IN REAL FAMILY INCOMES HAS NOT BEEN AS FAST AS IN THE LATTER 70'S WITH CONSEQUENTIAL DISAPPOINTMENT, HE ADDED.

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