XN000022-1984-09-14 — Page 2

FRIDAY, SEPTEMBER 14, 1984

FINANCIAL SECRETARY NOW PUTS GDP GROWTR AT EIGHT PER CENT

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THE FINANCIAL SECRETARY, SIR JOHN BREMRIDGE, FORECAST TODAY (FRIDAY) THAT HONG KONG'S GRÓSS DOMESTIC PRODUCT IN 1984 WOULD GROW BY EIGHT PER CENT IN REAL TERMS, UP FROM HIS FEBRUARY BUDGET PREDICTION OF SIX PER CENT.

PER CAPITA DP AT CURRENT PRICES IS NOW FORECAST TO BE OVER $45 000, REPRESENTING AN ANNUAL GROWTH RATE OF 17 PER CENT IN MONEY TERMS OR SEVEN PER CENT IN REAL TERMS.

SPEAKING AT THE BINNER OF THE HONG KONG ECONOMIC ASSOCIATION, SIR JOHN SAID THAT HIS UPWARD REVISION WAS BASED ON THE PERFORMANCE OF THE ECONOMY SO FAR THIS YEAR AND THE GENERALLY IMPROVING ECONOMIC PROSPECTS OF HONG KONG'S MAJOR TRADING PARTNERS.

HE ANTICIPATED THAT DOMESTIC EXPORTS WOULD GROW BY 18 PER CENT IN REAL TERMS THIS YEAR AND RE-EXPORTS BY 25 PER CENT, MAKING A 20 PER CENT EXPANSION FOR TOTAL EXPORTS, COMPARED WITH A 16 PER CENT GROWTH IN IMPORTS.

THESE REVISED GROWTH RATES OF THE TRADE AGGREGATES HAVE A SIGNIFICANT POSITIVE EFFECT ON HONG KONG'S GDP GROWTH, HE EXPLAINED.

OVERALL EXPENDITURE ON PLANT, HACHINERY AND EQUIPMENT IS NOW FORECAST TO INCREASE BY 17 PER CENT IN REAL TERMS THIS YEAR, UP FROM HIS BUDGET ESTIMATE OF ONLY SIX PER CENT.

ON THE EXCHANGE 'RATE SYSTEM, SIR JOHN REAFFIRMED THAT THE PRESENT LINK AT HK$7.8 TO THE US DOLLAR WILL NOT LIGHTLY BE CHANGED.+

+LARGELY BECAUSE OF THE GLOBAL STRENGTH OF THE US DOLLAR THE TRADE WEIGHTED VALUE OF THE HONG KONG DOLLAR HAS STRENGTHENED BY OVER 10 PER CENT SINCE LAST OCTOBER WHEN THE LINKED EXCHANGE RATE SYSTEM WAS INTRODUCED.

+DESPITE CRITICISMS AND RESERVATIONS EXPRESSED BY SOME, INCLUDING PEOPLE PRESENT HERE TONIGHT, THE EXCHANGE RATE OF THE HONG KONG DOLLAR HAS FOR MOST OF THE TIME MOVED WITHIN A NARROW RANGE OF HK$7.78 TO HK$7.85 PER US DOLLAR.

+THIS INDICATES THAT THE AIM OF THE SYSTEM WHICH IS TO STABILISE THE EXCHANGE RATE AND TO RESTORE CONFIDENCE IN THE HONG KONG DOLLAR — HAS LARGELY BEEN ACHIEVED. A VARIATION OF ABOUT ONE HALF OF ONE PER CENT IS HARDLY EXCESSIVE, SIR JOHN SA ID.

GROWING