XN000022-1982-02-24 — Page 7

WEDNESDAY, FEBRUARY 24, 1982

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*THIS IS THE RESULT OF THE GROWTH RATE OF THE LABOUR FORCE RETURNING TO AROUND TWO PER CENT TO THREE PER CENT AS THE EFFECTS OF ILLEGAL IMMIGRATION SUBSIDE, HE SAID.

FURTHERMORE THE GDP FORECAST, ALLIED WITH A FORECAST GROWTH RATE OF 1.9 PER CENT IN THE POPULATION, IMPLIES A GROWTH RATE OF SIX PER CENT IN PER CAPITA GDP, ONLY SLIGHTLY LESS THAN THE SEVEN PER CENT FOR 1981.

THIS MEANS THAT PER CAPITA GDP AT CURRENT PRICES WILL HAVE REACHED THE IMPRESSIVE FIGURE OF $30 370, WHICH IS 16 PER CENT HIGHER THAN IN 1981, MR BREMRIDGE POINTED OUT.

*AS THE DEPRESSIVE EFFECT OF IMMIGRATION ON WAGE INCREASES SHOULD CONTINUE TO SUBSIDE, THERE IS EVERY REASON TO BELIEVE THAT OUR LOWER PAID WORKERS WILL ENJOY THEIR FAIR SHARE OF THIS EXPECTED INCREASE IN PROSPERITY, HE SAID.

THE FINANCIAL SECRETARY ALSO FORECAST THAT THE GROWTH RATES FOR DOMESTIC EXPORTS AND RE-EXPORT WILL BE SEVEN PER CENT AND 20 PER CENT, GIVING A FORECAST OF 11 PER CENT FOR TOTAL EXPORTS IN 1982.

THE FORECAST FOR IMPORTS IS 12 PER CENT AND FOR NET EXPORT OF SERVICES FIVE PER CENT.

MR BREMRIDGE EXPECTED THE RATE OF INCREASE OF THE GDP DEFLATOR, A GENERAL MEASURE OF INFLATION, TO SLOW DOWN TO NINE PER CENT COMPARED WITH 10 PER CENT IN 1981- AND THE RATE OF INCREASE IN CONSUMER PRICES TO SLOW DOWN TO 12 PER CENT COMPARED WITH 15 PER CENT.

+SHOULD THIS FORECAST ACTUALLY BE BORNE OUT, IT WILL BE

ASSOCIATED WITH A FAIR MEASURE OF STABILITY, HE SAID.

+THERE SHOULD NOT BE ANY SIGNIFICANT IMBALANCE BETWEEN AGGREGATE DEMAND AND SUPPLY, AND THUS THE VISIBLE TRADE GAP SHOULD NOT WIDEN APPRECIABLY.

+THE GROWTH RATE OF DOMESTIC DEMAND SHOULD NOT BE SO RAPID AS TO PRE-EMPT ADEQUATE RESOURCES GOING TO THE EXPORT SECTOR. CONSEQUENTLY DOMESTIC EXPORTS SHOULD PLAY AN INCREASINGLY IMPORTANT PART IN PROVIDING THE IMPETUS TO ECONOMIC GROWTH.+

MR BREMRIDGE SAID THE PUBLIC SECTOR SHOULD STILL BE COMMANDING AN INCREASING SHARE OF THE ECONOMY'S RESOURCES, BUT THE EXTENT OF THE INCREASE SHOULD BE LESS THAN IN 1981.

THE GROWTH RATE OF INVESTMENT SHOULD BE REASONABLY RAPID, BUT IN RESPECT OF BUILDING AND CONSTRUCTION, BECAUSE THERE IS SOME SPARE CAPACITY AT PRESENT THE GROWTH SHOULD NOT BE SO FAST AS TO CREATE UNDUE PRESSURE ON COSTS.

BUT WITH THE PUBLIC SECTOR'S SHARE OF THIS INDUSTRY'S OUTPUT INCREASING WHEN PRIVATE SECTOR DEMAND IS ALSO GROWING, WE SHALL HAVE TO LOOK OUT FOR SIGNS OF SUCH PRESSURE DEVELOPING, HE SAID.

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