XN000022-1987-02-25 — Page 16

WEDNESDAY, FEBRUARY 25, 1987

+RE-EXPORTS ALSO PICKED UP IN THE SECOND QUARTER OF 1986. WITH INCREASED RE-EXPORTS OF GOODS COMING FROM CHINA, THE GROWTH RATE OF RE-EXPORTS FOR 1986 WAS ABOUT 14 PER CENT AND THAT OF RETAINED IMPORTS ABOUT 13 PER CENT. A VIRTUAL BALANCE EMERGED ON THE VISIBLE TRADE ACCOUNT,+ HE SAID.

MR JACOBS SAID THAT PRIVATE CONSUMPTION EXPENDITURE FIRMED UP IN THE LATTER PART OF 1906, RESULTING IN A GROWTH RATE OF 7 PER CENT FOR THE YEAR AS A WHOLE.

CAPITAL INVESTMENT ALSO SHOWED A MARKED IMPROVEMENT, GROWING BY 7 PER CENT IN 1986, AFTER A DECLINE OF 2 PER CENT IN 1947.. EXPENDITURE ON PLANT AND MACHINERY RECORDED AN INCREASE OF ABOUT 8 PER CENT.

+THERE WAS A PARTICULARLY WELCOME INCREASE IN SUCH EXPENDITURE BY MANUFACTURERS, REFLECTING GREATER ACTIVITY IN THE MANUFACTURING SECTOR, AND CONFIDENCE THAT THIS ACTIVITY WOULD CONTINUE, HE ADDED.

IN NATIONAL ACCOUNTS TERMS, PUBLIC SECTOR EXPENDITURE RECORDED A GROWTH OF 1 PER CENT IN 1986, WITH THE DECLINE IN GOVERNMENT CAPITAL EXPENDITURE OFFSET BY AN INCREASE IN CONSUMPTION EXPENDITURE.

+80, IN 1986, WE ENJOYED BUOYANT PRIVATE SECTOR ACTIVITY LED BY A STRONG GROWTH IN EXPORTS. THIS RESULTED IN A HIGHLY SATISFACTORY OVERALL ECONOMIC PERFORMANCE,+ HE SAID.

+THE GROWTH RATE OF THE GROSS DOMESTIC PRODUCT (eDP) IN 1986 WAS SLIGHTLY BELOW 9 PER CENT, MUCH HIGHER THAN THE GROWTH RATE IN 1985 OF AROUND 1 PER CENT, AND JUST BELOW THAT ACHIEVED IN 1984.

+IT IS CONSIDERABLY BETTER THAN MY OWN MID-YEAR FORECAST. WHAT WE HAVE SEEN IS THE RESULT OF A PARTICULARLY GOOD SECOND HALF.+

ON THE UNEMPLOYMENT RATE AND THE UNDEREMPLOYMENT RATE MR JACOBS KOTED THEY HAD DECLINED TO 2.2 PER CENT AND 1.2 PER CENT RESPECTIVELY IN THE FOURTH QUARTER.

HE POINTED OUT THAT EMPLOYMENT ROSE IN PRACTICALLY ALL SECTORS, AND EARNINGS IN MOST SECTORS INCREASED SIGNIFICANTLY IN REAL TERMS, AS THE RAPID INCREASE IN NOMINAL EARNINGS WAS ACCOMPANIED BY ONLY MODEST INFLATION,

MR JACOBS ALSO SAID THAT AT 2.0 PER CENT, THE AVERAGE RATE OF INCREASE IN THE CONSUMER PRICE INDEX (A) WAS LOWER THAN THE RATE OF 3.2 PER CENT RECORDED IN 1985. THIS WAS BROUGHT ABOUT BY SOFT WORLD COMMODITY PRICES AND, IN PARTICULAR, LOWER IMPORT PRICES OF GOODS FROM CHINA.

/BUT HE