XN000022-1981-10-25 — Page 3

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SUNDAY, OCTOBER 25, 1981

THE ECONOMY SHOWING STRENGTH

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COMMENTING ON THE STATISTICS ON EMPLOYMENT, TRADE AND CONSUMER PRICES PUBLISHED TODAY BY THE CENSUS AND STATISTICS DEPARTMENT A SPOKESMAN FROM THE GOVERNMENT SECRETARIAT SAID THAT THE WAY WITH WHICH THE ECONOMY IS ADJUSTING TO DEAL WITH UNFAVOURABLE ECONOMIC CONDITIONS IN HONG KONG'S MAJOR MARKETS IS HIGHLY ENCOURAGING.

HE POINTED OUT THAT EMPLOYMENT IN THE MANUFACTURING SECTOR IN JUNE THIS YEAR, AT 943 000 WAS A RECORD SO WAS THE VALUE OF DOMESTIC EXPORTS IN SEPTEMBER AT $7 659 MILLION.

SO DESPITE CERTAIN PUBLIC ANXIETY ABOUT THE GENERAL ECONOMIC SITUATION, THE MANUFACTURING SECTOR, THE BACKBONE OF THE ECONOMY, IS HOLDING UP EXTREMELY WELL.

THE SPOKESMAN FURTHER POINTED OUT THAT THE PROVISIONAL TRADE FIGURES FOR SEPTEMBER SHOWED THAT THE VALUE OF DOMESTIC EXPORTS WAS 28 PER CENT HIGHER THAN IN SEPTEMBER LAST YEAR. PUTTING THE MONTH'S FIGURE INTO CONTEXT, HE SAID THAT THE VALUE OF DOMESTIC EXPORTS IN THE THIRD QUARTER WAS 20 PER CENT HIGHER THAN IN THE THIRD QUARTER OF 1980, WHILE THE CORRESPONDING COMPARISON FOR THE FIRST HALF OF THIS YEAR WAS 14 PER CENT. DISCOUNTING FOR PRICE INCREASES, THIS MEANS AN ACCELERATION IN THE YEAR-ON-YEAR GROWTH RATE OF DOMESTIC EXPORTS FROM LESS THAN 6 PER CENT IN THE FIRST HALF OF THIS YEAR TO ABOUT 8 PER CENT IN THE THIRD QUARTER.

THE SPOKESMAN ALSO DREW ATTENTION TO ANOTHER ENCOURAGING ASPECT. HE SAID THAT ALTHOUGH THE GROWTH RATE OF IMPORTS THAT WERE RETAINED IN HONG KONG CONTINUED TO BE FAIRLY RAPID IN THE THIRD QUARTER, THIS WAS THE RESULT OF A FAIRLY SHARP ACCELERATION IN THE GROWTH RATE OF RETAINED IMPORTS OF RAW MATERIALS AND SEMI- MANUFACTURES OFFSET BY AN EQUALLY SHARP SLOWING DOWN IN THE GROWTH RATE OF RETAINED IMPORTS OF CONSUMER GOODS.

WHILE EMPHASIS ING THAT IT WAS STILL TOO EARLY TO SAY THAT THE RECENT SHIFT IN THE IMPETUS TO GROWTH FROM DOMESTIC EXPORTS TO DOMESTIC DEMAND HAS REVERSED, THE SPOKESMAN SAID THAT THERE WERE CERTAINLY INDICATIONS OF SUCH A REVERSAL STARTING TO TAKE PLACE.

AS REGARDS THE CONSUMER PRICE INDEXES WHICH WERE UNCHANGED IN SEPTEMBER COMPARED WITH AUGUST, THE SPOKESMAN SAID THAT NOT TOO MUCH SHOULD BE READ INTO FIGURES FOR ONE MONTH. WHILE THIS DEVELOPMENT WAS OBVIOUSLY WELCOME, HE SAID THAT THE DEPRECIATION IN THE EXCHANGE VALUE OF THE HONG KONG DOLLAR IN THE THIRD QUARTER OF THIS YEAR MAY EXERCISE AN UNFAVOURABLE EFFECT IN THE FUTURE. BUT HE ADDED THAT WHILE CONSUMER PRICES HAVE INCREASED BY ALMOST 16 PER CENT DURING THE TWELVE MONTHS ENDING SEPTEMBER THIS YEAR, DOMESTIC INFLATION, AS MEASURED BY THE G.D.P. DEFLATOR, IS ESTIMATED TO BE ONLY ABOUT 10 PER CENT THIS YEAR.

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