XN000022-1984-04-25 — Page 8

WEDNESDAY, APRIL 25, 1984

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+BUT BECAUSE THE LEVEL OF STARTS HAS BEEN SO LOW IN RECENT QUARTERS AND BECAUSE IT TAKES TIME FOR AN IMPROVEMENT IN STARTS TO BE REFLECTED IN ADDITIONAL WORK DONE, I DO NOT PROPOSE TO ALTER MY FORECAST OF A FURTHER SLIGHT FALL IN PRIVATE INVESTMENT IN BUILDING AND CONSTRUCTION, HE EXPLAINED.

ON INFLATION, SIR JOHN SAID THAT SO FAR THIS YEAR, IT HAD BEEN SLOWING DOWN FROM A YEAR ON YEAR RATE OF ABOUT 12.5 PER CENT IN JANUARY TO SLIGHTLY OVER NINE PER CENT IN MARCH.

AND HE EXPECTED THAT THE LINKED EXCHANGE RATE SYSTEM FOR THE HONG KONG DOLLAR WOULD BRING INFLATION DOWN FURTHER.

+THE SPEED AT WHICH THIS OCCURS DEPENDS LARGELY ON THE RATE AT WHICH THE RESIDUAL ADVERSE IMPACT OF LAST YEAR'S DEPRECIATION OF THE HONG KONG DOLLAR WORKS ITS WAY THROUGH OUR ECONOMY PLUS THE EXTENT TO WHICH THE US DOLLAR MAY DEPRECIATE AGAINST OTHER CURRENCIES THIS YEAR.

THOUGH SOME

+ THE LATTER IS SHEER GUESSWORK AT PRESENT. FURTHER FALL IS PROBABLE, I PERSONALLY WOULD NOT UNDERESTIMATE THE STRENGTH OF THE U.S. ECONOMY,+ SIR JOHN SAID.

FOR THESE REASONS, HE SAID HE WOULD HOLD TO HIS FORECAST OF INFLATION COMING DOWN TO SEVEN PER CENT BY THE END OF THE YEAR, DESPITE SUGGESTIONS BY SOME MEMBERS OF THE COUNCIL THAT IT WAS OVER-OPTIMISTIC.

WITH THE DEPRECIATION OF THE HONG KONG DOLLAR STOPPED

IN SEPTEMBER LAST YEAR, PRICE INCREASES STEMMING DIRECTLY FROM THIS SOURCE SHOULD SOON BE OVER, HE ADDED. ·

է

+ THE MAIN DANGER NOW IS INTERNALLY GENERATED COST

INCREASES. IF THESE ARE SIGNIFICANT THEY WILL TEND TO DELAY THE DOWNWARD TREND WHICH I HAVE FORECAST, HE ADDED.

PROPOSALS TO DEVELOP LOCAL ADMINISTRATION WELCOMED

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THERE WAS BROAD AND GENERAL SUPPORT FOR THE PROPOSED CHANGES IN LOCAL ADMINISTRATION, AND A CONSOLIDATED REPORT WOULD SHORTLY BE SUBMITTED TO THE GOVERNOR, THE SECRETARY FOR DISTRICT ADMINISTRATION, THE HON DAVID AKERS-JONES, SAID TODAY.

THE REPORT, BASED ON EXTENSIVE PUBLIC CONSULTATION OVER THE PAST TWO MONTHS, WOULD SOON BE PUT TO THE EXECUTIVE COUNCIL, +SO THAT ACTUAL DECISIONS MAY BE MADE IN SUFFICIENT TIME TO INTRODUCE WHATEVER LEGISLATION IS NECESSARY, AND TO MAKE THE REQUISITE FINANCIAL AND ADMINISTRATIVE ARRANGEMENTS WHATEVER THEY MAY BE, BEFORE THE MARGH. 1985 DISTRICT BOARD ELECTIONS.+

/SPEAKING IN ..................