XN000022-1988-08-25 — Page 3

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THURSDAY, AUGUST 25, 1988

WITHIN OVERALL IMPORTS OF CAPITAL GOODS, RETAINED IMPORTS OF INDUSTRIAL MACHINERY FOR USE IN THE MANUFACTURING SECTOR RECORDED A YEAR-ON-YEAR GROWTH RATE OF ABOUT 10 PER CENT IN REAL TERMS IN THE FIRST HALF OF 1988. THE CORRESPONDING GROWTH RATB FOR 1987 AS A WHOLE WAS 18 PER CENT.

INDICATIVE OF THE CONTINUED TIGHT LABOUR MARKET CONDITIONS, BOTH THE UNEMPLOYMENT RATE AND THE UNDEREMPLOYMENT RATE REMAINED AT VERY LOW LEVELS DURING THE FIRST HALF OF 1988.

TIK SKASONALLY ADJUSTED UNEMPLOYMENT RATE UNDEREMPLOYMENT RATE WERE 1.8 PER CENT AND 0.7 PER CENT IN THE SECOND QUARTER OF 1988.

AND RESPECTIVELY

THE

ALTHOUGH THE GROWTH RATE OF DOMESTIC EXPORTS, AND THUS THAT OF MANUFACTURING ACTIVITY, CONTINUED TO SLOW DOWN IN THE SECOND QUARTER OF 1988, THE OVERALL DEMAND FOR LABOUR, PARTICULARLY IN THE BUILDING AND CONSTRUCTION AND THE SERVICE SECTORS, REMAINED STRONG.

1988.

THE RATE OF INFLATION CONTINUED TO RISE IN THE FIRST HALF OF

ON A YEAR-ON-YEAR COMPARISON, THE CONSUMER PRICE INDEX (A) ROSE FROM 5.6 PER CENT AND 6.7 PER CENT IN THE THIRD AND FOURTH QUARTERS OF 1987 RESPECTIVELY, TO 6.8 PER CENT IN THE FIRST QUARTER AND 7 PER CENT IN THE SECOND QUARTER OF 1988.

THE THE LEVELS

THE MOST RECENT INFLATION RATES, THOUGH HIGHER THAN - IN PAST THREE YEARS, ARE NOT PARTICULARLY HIGH COMPARED WITH EXPERIENCED IN HONG KONG AT TIMES DURING THE PAST DECADE.

MONETARY AND

THE PRESSURE OF DEMAND RELATIVE ΤΟ THE SUPPLY OF RESOURCES WITHIN THE ECONOMY, THE LAGGED EFFECTS OF THE RAPID CREDIT EXPANSION AND OF THE DEPRECIATION OF THE FIONG KONG DOLLAR DURING 1987, INCREASES IN THE PRICES OF FOODSTUFFS IMPORTED FROM CHINA, AND THE UPSURGE IN WORLD COMMODITY PRICES ALL CONTRIBUTED TO THE RECENT INCREASE IN CONSUMER PRICE INFLATION..

BETWEEN THE SECOND QUARTER OF 1987 AND THE 1988, THE CPI (B) AND THE HANG SENG CPI ROSE BY 7 PER CENT RESPECTIVELY.

SECOND QUARTER OF PER CENT AND 8.4

OF

THE HALF-YEARLY ECONOMIC REPORT 1988 UPDATES THE ASSESSMENT THE LOCAL ECONOMIC SITUATION WHICH WAS GIVEN IN THE FIRST QUARTER ECONOMIC REPORT 1988.

APART FROM PROVIDING 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.

YEAR-ON-YEAR

ON THE EXTERNAL SECTOR, THE REPORT NOTES THAT THE GROWTH RATES OF DOMESTIC EXPORTS TO ALL MAJOR MARKETS SLOWED DOWN MARKEDLY IN THE FIRST HALF OF 1988 COMPARED WITH THE SECOND HALF OF

1987.

/DOMESTIC EXPORTS

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