XN000022-1982-01-21 — Page 5

THURSDAY, JANUARY 21, 1982

4.

REAL GDP GROWTH UP TEN PER CENT, GOVERNOR REPORTS

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THE GROWTH RATE OF OUR GROSS DOMESTIC PRODUCT IN 1981 SHOULD BE IN LINE WITH THE FINANCIAL SECRETARY'S MID-YEAR FORECAST OF 10 PER CENT IN REAL TERMS, THE GOVERNOR, SIR MURRAY MACLEHOSE SAID TODAY (THURSDAY).

THIS MEANS THAT IT IS NOW THE SIXTH CONSECUTIVE YEAR WHEN OUR ECONOMY HAS GROWN IN REAL TERMS BY 10 PER CENT OR MORE, OR IN OTHER WORDS IT HAS ALMOST DOUBLED IN SIX YEARS, HE SAID.

SPEAKING AT THE HONG KONG GENERAL CHAMBER OF COMMERCE ANNUAL COMMITTEE MEMBERS DINNER, SIR MURRAY SAID 1981 TURNED OUT RATHER BETTER THAN EXPECTED, WITH DOMESTIC EXPORTS OVER THE YEAR AS A WHOLE GROWING BY 7 PER CENT IN REAL TERMS.

+THIS MAY HAVE BEEN LOWER THAN THE 11 PER CENT OF 1980 BUT GIVEN THE TRADING CONDITIONS IT WAS A GREAT TRIBUTE TO THE EFFICIENCY OF OUR BUSINESSMEN, AND A RECORD OF WHICH MOST COUNTRIES LAST YEAR WOULD HAVE BEEN ENVIOUS.

SIR MURRAY ALSO SAID THAT THE AVERAGE GROWTH RATE OF GDP PER CAPITA FOR 1981 AT 7.4 PER CENT IN REAL TERMS WAS NOT MUCH BELOW THE ANNUAL GROWTH OF 9 PER CENT IN THE PREVIOUS FIVE YEARS, ALTHOUGH HE AGREED THAT THE WIDE DISTRIBUTION OF THE BENEFITS OF THIS GROWTH RATE, SO APPARENT BETWEEN 1976 AND 1979 HAS BEEN DISTORTED BY A COMBINATION OF THE EFFECTS OF IMMIGRATION AND INFLATION.

+ONCE AGAIN THE EXTRAORDINARY ABILITY OF OUR MANUFACTURING INDUSTRY LAY AT THE HEART OF THE ECONOMY'S SUCCESS IN 1981, BUT THE CONTINUED AND RAPID EXPANSION OF OUR TERTIARY SERVICES ALSO HELPED, + HE SAID.

SIR MURRAY SAID THE ECONOMIC GROWTH IN 1981 WAS LED BY DOMESTIC DEMAND RATHER THAN BY EXPORTS. PRIVATE CONSUMER EXPENDITURE GREW BY ABOUT 10 PER CENT IN REAL TERMS, SIGNIFICANTLY HIGHER THAN GROWTH RATE OF DOMESTIC EXPORTS AT 7 PER CENT.

THERE WAS A CLEAR TENDENCY FOR THE GROWTH RATE OF CONSUMER DEMAND TO SLOW DOWN DURING THE COURSE OF THE YEAR, HE SAID.

SIR MURRAY SAID THE NUMBER OF PEOPLE EMPLOYED IN MANUFACTURING LAST JUNE WAS THE HIGHEST ON RECORD.

HE SAID THE INCREASE IN UNEMPLOYMENT LAST YEAR, LARGELY CAUSED BY IMMIGRATION, REACHED A LOW OF 4.1 PER CENT IN MARCH, BUT THEN BEGAN TO RECOVER AND BY SEPTEMBER THE SEASONALLY ADJUSTED RATE WAS 3.6 PER CENT.

+DRASTIC REDUCTION IN ILLEGAL IMMIGRATION HAS BEEN A GREAT RELIEF. OUR POPULATION IS ESTIMATED TO HAVE INCREASED BY 1.7 PER CENT IN 1981 COMPARED WITH 3.2 PER CENT IN 1978, 6.1 PER CENT IN 1979 AND 2.6 PER CENT IN 1980.

+WHILE I WOULD STILL LIKE TO SEE THE NUMBER OF LEGAL IMMIGRANTS REDUCED, THIS IS A MUCH IMPROVED SITUATION. WE CAN NOW GET BACK ON TO THE COURSE IN WHICH ECONOMIC GROWTH REFLECTS HIGHER PRODUCTIVITY AND AN IMPROVED STANDARD OF LIVING, AND NOT JUST MORE PEOPLE

WORK ING. +

/THE MAIN