XN000022-1986-11-24 — Page 4

3

MONDAY, NOVEMBER 24, 1986

AGAINST THE BACKGROUND OF A STRONG DOMESTIC EXPORT PERFORMANCE AND CONTINUED GROWTH IN DOMESTIC DEMAND IN THE THIRD QUARTER, BOTH THE UNEMPLOYMENT RATE AND THE UNDEREMPLOYMENT RATE DECLINED FURTHER FROM THEIR ALREADY LOW LEVELS IN THE FIRST HALF OF THE YEAR, SO THAT THE LABOUR FORCE WAS EFFECTIVELY FULLY EMPLOYED. MOREOVER, THIS HAS NOT GENERATED MUCH PRESSURE ON THE GENERAL PRICE LEVEL, AND THE RATE OF INFLATION REMAINED LOW.

DOMESTIC DEMAND, IN RESPECT OF CONSUMPTION AND INVESTMENT, WAS GENERALLY FIRM IN THE THIRD QUARTER. PRIVATE CONSUMPTION DEMAND SHOWED A FURTHER IMPROVEMENT, AS INDICATED BY YEAR-ON-YEAR GROWTH RATES IN REAL TERMS OF ABOUT 7 PER CENT IN RETAINED IMPORTS OF FOODSTUFFS AND OF ABOUT 6 PER CENT IN RETAINED IMPORTS OF CONSUMER GOODS.

THE LATEST FIGURES ON RETAIL SALES ALSO INDICATE AN INCREASED DEMAND FOR SOME MAJOR CONSUMER ITEMS SUCH AS FOODSTUFFS AND CLOTHING.

AT THE SAME TIME, THERE WAS A REVIVAL IN INVESTMENT DEMAND. REFLECTING THIS, RETAINED IMPORTS OF CAPITAL GOODS GREW BY ABOUT 10 PER CENT IN REAL TERMS IN THE THIRD QUARTER, AFTER HAVING RECORDED ZERO GROWTH IN THE FIRST QUARTER AND A DECLINE OF 11 PER CENT IN THE SECOND QUARTER,

OF PARTICULAR NOTE IS THE STRONG RECOVERY IN MANUFACTURING INVESTMENT, AS INDICATED BY A YEAR-ON-YEAR GROWTH RATE OF ABOUT 23 PER CENT IN REAL TERMS IN RETAINED IMPORTS OF INDUSTRIAL MACHINERY FOR USE IN THE MANUFACTURING SECTOR IN THE FIRST NINE MONTHS OF THIS YEAR,

THE REPORT ASSESSES DEVELOPMENTS IN THE ECONOMY IN THE THIRD QUARTER OF 1986 USING SUCH STATISTICS AS ARE AVAILABLE, IT ALSO UPDATES THE ANALYSIS OF THE ECONOMY WHICH WAS GIVEN IN THE HALF-YEARLY ECONOMIC REPORT 1986 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 NOTES THAT DOMESTIC EXPORTS TO ALL MAJOR MARKETS GREW RAPIDLY IN THE THIRD QUARTER OF 1986 COMPARED WITH THE SAME QUARTER LAST YEAR. THE GROWTH IN DOMESTIC EXPORTS WAS PARTICULARLY STRONG IN SUCH MARKETS AS THE FEDERAL REPUBLIC OF GERMANY AND JAPAN, WHERE THE CURRENCY APPRECIATION AGAINST THE HONG KONG DOLLAR HAS BEEN RELATIVELY LARGE.

/DOMESTIC EXPORTS