XN000022-1984-11-23 — Page 5

FRIDAY, NOVEMBER 23, 1984

CONTINUED GROWTH WITH LOWER INFLATION

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DOMESTIC EXPORTS CONTINUED TO EXPAND RAPIDLY IN THE THIRD QUARTER OF 1984, BY 33 PER CENT IN VALUE TERMS OR ABOUT 17 PER CENT IN REAL TERMS COMPARED WITH EXPORTS FOR THE THIRD QUARTER OF 1983, ACCORDING TO THE THIRD QUARTER ECONOMIC REPORT 1984 PUBLISHED TODAY BY THE GOVERNMENT.

DOMESTIC DEMAND IMPROVED MODERATELY, AS SHOWN BY THE INCREASES IN REAL TERMS IN RETAINED IMPORTS OF CAPITAL GOODS AND OF CONSUMER GOODS. THE CONTINUED ECONOMIC GROWTH WAS ACCOMPANIED BY A SLOWING DOWN IN THE RATE OF INFLATION.

THE RATE OF INFLATION (AS MEASURED BY THE CONSUMER PRICE INDEX (A)) HAD SLOWED DOWN FROM A YEAR-ON-YEAR RATE OF 12.4 PER CENT IN JANUARY 1984 TO 7.1 PER CENT BY SEPTEMBER.

THE QUARTERLY INFLATION RATES EXHIBITED A SIMILAR DOWNWARD TREND.

ON A YEAR-ON-YEAR BASIS, THE RATE OF INFLATION AVERAGED 8.6 PER CENT IN THE THIRD QUARTER OF 1984, COMPARED WITH 10.8 PER CENT IN THE FIRST QUARTER AND 9.4 PER CENT IN THE SECOND QUARTER OF THE YEAR. THIS DECELERATION LARGELY REFLECTED THE STABILITY OF THE HONG KONG DOLLAR IN TERMS OF THE U.S. DOLLAR UNDER THE LINKED EXCHANGE RATE SYSTEM. BECAUSE OF THE GLOBAL STRENGTH OF THE U.S. DOLLAR, THE HONG KONG DOLLAR HAS APPRECIATED AGAINST THE CURRENCIES OF MANY SUPPLIERS SINCE OCTOBER 1983.

ON THE EMPLOYMENT SITUATION, THE REPORT NOTES THAT AFTER THE CONSIDERABLE IMPROVEMENT IN THE FIRST HALF OF 1984, THE UNEMPLOYMENT AND UNDEREMPLOYMENT SITUATION REMAINED LARGELY STABLE IN THE THIRD QUARTER. WITH THE SEASONALLY ADJUSTED UNEMPLOYMENT RATE AT 3.5 PER CENT AND THE UNDEREMPLOYMENT RATE AT 1.0 PER CENT, THE LABOUR FORCE WAS EFFECTIVELY FULLY EMPLOYED DURING THE QUARTER.

THE REPORT ASSESSES ECONOMIC DEVELOPMENTS IN THE THIRD QUARTER OF 1984, USING AVAILABLE STATISTICS. IT ALSO UPDATES THE ANALYSIS OF THE ECONOMY IN THE HALF-YEARLY ECONOMIC REPORT 1984 PUBLISHED IN AUGUST. APART FROM GIVING AN OVERALL VIEW, THE REPORT ALSO CONTAINS INDIVIDUAL CHAPTERS ON THE EXTERNAL SECTOR, THE FINANCIAL SECTOR, THE LABOUR SECTOR, ACTIVITY IN SELECTED SECTORS AND PRICES.

ON THE EXTERNAL SECTOR, THE REPORT SAYS THAT DOMESTIC EXPORTS TO THE UNITED STATES. THE FEDERAL REPUBLIC OF GERMANY, THE UNITED KINGDOM, CHINA AND JAPAN CONTINUED TO GROW IN REAL TE-MS IN THE THIRD QUARTER OF 1984 OVER THE SAME QUARTER LAST CAR, REFLECTING THE IMPROVED IMPORT DEMAND IN THESE MAJOR MKETS. MOREOVER, THE DEPRECIATION OF THE HONG KONG DOLLAR

INST THE U.S. DOLLAR AND THE YEN BETWEEN THE FIRST NINE THS OF 1984 AND THE SAME PERIOD LAST YEAR HAS HELPED TO NTAIN THE COMPETITIVENESS OF DOMESTIC EXPORTS TO THE UNITED TATES ANT JAPAN.

/IMPORTS AND