XN000022-1987-09-21 — Page 2

MONDAY, SEPTEMBER 21, 1987

ECONOMY CONTINUES TO GROW FOR REST OF YEAR, FS

THE FINANCIAL SECRETARY, MR PIERS JACOBS, SAID TONIGHT (MONDAY) HONG KONG'S ECONOMY WILL CONTINUE TO GROW FOR THE REST OF THE YEAR, ALBEIT AT A MORE MODERATE RATE THAN THE EARLIER MONTHS BECAUSE OF ITS CAPACITY LIMITS.

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GIVING HIS MID-YEAR ECONOMIC REVIEW AT THE HONG KONG ECONOMIC ASSOCIATION DINNER ON THE THEME OF "BUSINESS CONFIDENCE" MR JACOBS PREDICTED THE ODP TO GROW AT DOUBLE THE RATE HE FORECAST IN HIS BUDGET IN FEBRUARY.

HE NOW FORECAST THE GDP FOR 1987 AS A WHOLE TO GROW FROM THE BUDGET FORECAST OF SIX PER CENT TO 12 PER CENT, OR IN PER CAPITA TERMS, $62,600 AT CURRENT PRICES, REPRESENTING A GROWTH OF 17 PER CENT IN MONEY TERMS AND 11 PER CENT IN REAL TERMS OVER 1986.

"THIS GROWTH, IF REALISED, WILL PLACE THE HONG KONG ECONOMY IN THE ENVIABLE POSITION OF HAVING ENJOYED AVERAGE GROWTH IN REAL TERMS OF MORE THAN 10 PER CENT FOR TWO CONSECUTIVE YEARS,' HE ADDED.

MR JACOBS ALSO ADJUSTED UPWARDS SUBSTANTIALLY THE GROWTH RATE FORECAST OF OTHER COMPONENTS OF THE ECONOMY. SIGNIFICANTLY, HE REVISED THE GROWTH RATE OF EXPENDITURE ON PLANT AND MACHINERY TO 25 PER CENT, FROM HIS BUDGET FORECAST OF 11 PER CENT.

EXPORT GROWTH

HE SAID THIS REFLECTED THE FASTER THAN EXPECTED AND THE FLOW OF RETAINED IMPORTS OF PLANT AND MACHINERY IN THE FIRST HALF OF THIS YEAR.

MR JACOBS ALSO SAID THE ECONOMIC GROWTH WOULD EXPORT LED, BUT THEIR GROWTH RATE IS LIKELY ΤΟ SLOWING IN THE SECOND HALF OF THE YEAR WHEN COMPARED HALF.

CONTINUE ΤΟ BE EXPERIENCE SOME WITH THE FIRST

BUT FOR THE YEAR AS A WHOLE, HE STILL REVISED THE FORECAST GROWTH RATES OF DOMESTIC EXPORTS AND RE-EXPORTS SUBSTANTIALLY UPWARDS, AT 20 PER CENT AND 37 PER CENT RESPECTIVELY, PUSHING FORECAST GROWTH RATE OF TOTAL EXPORTS UPWARDS TO 27 PER CENT COMPARED WITH 10 PER CENT IN THE BUDGET.

MR JACOBS ALSO EXPECTED THE GROWTH RATE OF DOMESTIC PICK UP FURTHER AS THE INCOME DERIVED FROM EXPORTS IS SPF HE REVISED HIS FORECAST GROWTH RATE OF DOMESTIC DEMANDS CENT.

DEMAND ΤΟ AND HENCE, TO 12 PER

HE SAID THE PRIVATE CONSUMER DEMAND HAS REMAINED BUOYANT IN THE FIRST HALF OF THE YEAR AND LATEST FIGURES ON RETAIL SALES ALSO INDICATE STRONG DEMAND FOR MOST CONSUMER PRODUCTS. HE THEREFORE REVISED THE SEVEN PER CENT GROWTH RATE BUDGET FORECAST FOR PRIVATF CONSUMPTION EXPENDITURE TO 11 PER CENT.

/ON INFLATION,