XN000022-1983-05-24 — Page 2

TUESDAY, MAY 24, 1983

DOMESTIC EXPORTS ON STEADY RECOVERY

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IN THE FIRST QUARTER OF 1983, DOMESTIC EXPORTS BEGAN TO RECOVER AND RECORDED A YEAR-ON-YEAR GROWTH RATE IN REAL TERMS OF TWO PER CENT, ACCORDING TO THE FIRST QUARTER ECONOMIC REPORT 1983 PUBLISHED TODAY BY THE GOVERNMENT.

THE TREND OF DECLINING GROWTH RATES OF DOMESTIC EXPORTS DURING 1982 HAS THUS BEEN REVERSED.

THE REPORT SAYS THAT THE PROSPECTS FOR DOMESTIC EXPORTS ARE NOW BRIGHTER.

APART FROM THE SLOW BUT GRADUAL IMPROVEMENT IN THE ORDER- BOOK POSITIONS REPORTED BY MANUFACTURERS IN RECENT MONTHS, THERE ARE MORE DEFINITE INDICATIONS OF AN ECONOMIC RECOVERY IN TWO OF HONG KONG'S MAJOR MARKETS, THE UNITED STATES AND THE FEDERAL REPUBLIC OF GERMANY.

THE REPORT NOTES THAT, HOWEVER, THE SUPPLY OF LABOUR FOR 1982 AS A WHOLE GREW AT A SLIGHTLY FASTER RATE THAN THE DEMAND FOR IT.

IN CONSEQUENCE, OVERALL EMPLOYMENT DECLINED SOMEWHAT AND THE UNEMPLOYMENT AND UNDEREMPLOYMENT RATES BOTH ROSE IN 1982. THESE TRENDS CONTINUED INTO 1983.

COMMENTING ON THE EMPLOYMENT/UNEMPLOYMENT SITUATION, A GOVERNMENT SPOKESMAN POINTED OUT THAT GIVEN THERE WAS SOME REVIVAL IN MANUFACTURING ACTIVITY IN THE FIRST QUARTER OF 1983, THE UNDERLYING ECONOMIC SITUATION WAS ALREADY IMPROVING.

BUT THE IMPROVEMENT WAS NOT YET SUFFICIENT TO RESULT IN A FALL IN THE UNEMPLOYMENT RATE.

HE ADDED THAT CHANGES IN UNEMPLOYMENT TEND TO LAG BEHIND CHANGES IN THE ECONOMY, SO THAT A RISING UNEMPLOYMENT RATE DOES NOT NECESSARILY MEAN THAT THE UNDERLYING ECONOMIC SITUATION IS ALSO DETERIORATING.

THE RATE OF INFLATION IN THE FIRST QUARTER OF 1983 REMAINED ABOUT THE SAME AS IN THE FOURTH QUARTER OF 1982.

THE REPORT ATTRIBUTES THIS TO THE RELATIVE BALANCE BETWEEN AGGREGATE DEMAND AND AGGREGATE SUPPLY IN THE DOMESTIC ECONOMY, AS WELL AS TO THE CONTINUED EASING OF INFLATION ELSEWHERE IN THE WORLD.

THE REPORT UPDATES THE ANALYSES OF THE ECONOMY IN 1982 IN THE ECONOMIC BACKGROUND DOCUMENT PUBLISHED ON BUDGET DAY, AND ASSESSES SUBSEQUENT ECONOMIC DEVELOPMENTS IN THE FIRST QUARTER OF 1983 USING SUCH STATISTICS AS ARE AVAILABLE.

/APART FROM