XN000022-1989-05-24 — Page 30

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WEDNESDAY, MAY 24, 1989

TAKEN

TOGETHER, GROWTH RATE OF GDP ATTACHED TABLE).

THE FORECAST (SEE DETAILS IN THE

THESE CHANGES HAVE NOT ALTERED FOR 1989, AT 6 PER CENT

THE PERFORMANCE OF DOMESTIC EXPORTS IN THE FIRST NOT BEEN AS GOOD AS INITIALLY EXPECTED.

QUARTER HAD

ALTHOUGH THE LATEST ORDERS POSITION AND THE RECENT INCREASES IN THAT RETAINED IMPORTS OF RAW MATERIALS AND SEMI-MANUFACTURES SUGGEST

IN THE SECOND THE PERFORMANCE OF DOMESTIC EXPORTS COULD BE BETTER

HONG KONG'S MAJOR THE

ECONOMIC GROWTH IN QUARTER,

SLOW-DOWN IN

AND THE FEDERAL, OVERSEAS MARKETS, PARTICULARLY THE UNITED STATES REPUBLIC OF GERMANY, SEEMS LIKELY TO RESTRAIN THEIR DEMAND FOR KONG'S PRODUCTS IN THE SECOND HALF OF THE YEAR.

MOREOVER, THE STRENGTHENING OF BEGINNING OF

THE

HONG

SINCE THE US DOLLAR

ADVERSELY EXPECTED TO AFFECT YEAR COULD BE THE PRICE COMPETITIVENESS OF HONG KONG'S PRODUCTS IN SOME MARKETS.

THE

THE THE SLOWER FOR THE SAME TO GROW MORE

TO BE RESTRAINED BY DOMESTIC EXPORTS TO CHINA ARE LIKELY CHINA'S AUSTERITY MEASURES AS WELL AS BY A POSSIBLE SLOW-DOWN IN EXPANSION OF OUTWARD PROCESSING ACTIVITIES, IN LINE WITH GROWTH IN OVERSEAS DEMAND FOR HONG KONG'S PRODUCTS. REASONS HONG KONG'S RE-EXPORTS TO CHINA ARE EXPECTED SLOWLY.

DOMESTIC DEMAND IS EXPECTED TO REMAIN ROBUST FOR MOST OF

THE SLOWER GROWTH YEAR BUT WOULD EVENTUALLY BE RESTRAINED BY EXPORTS.

THE

IN

SUPPORT IN THE BROUGHT

A NUMBER OF FACTORS ARE EXPECTED TO PROVIDE SHORT TERM, INCLUDING THE INCREASE IN CONSUMPTION EXPENDITURE

IN MACHINERY AND ABOUT BY HIGHER INCOMES, CONTINUED INVESTMENT EQUIPMENT IN RESPONSE TO THE TIGHT LABOUR MARKET CONDITIONS, INTENSIVE EXPANDING SERVICE BUILDING AND CONSTRUCTION ACTIVITY, AND THE FAST SECTORS.

THUS, DOMESTIC DEMAND IS EXPECTED TO

PROVIDE A

RELATIVELY ENVISAGED

GREATER IMPETUS TO OVERALL ECONOMIC GROWTH IN 1989 THAN WAS IN THE EARLIER FORECAST.

INFLATIONARY

ARE PRESSURES

EXPECTED TO BE

A

FOR SUSTAINED

RESULT WHILE BEFORE EASING, PROBABLY TOWARDS THE END OF THE YEAR AS A

CURRENTLY, EXCESS ECONOMIC ACTIVITY. OF A CONTINUED MODERATION IN

SOURCE OF SUCH INFLATIONARY IN DEMAND PRESSURES,

THE ECONOMY

IS THE

MAIN

ECONOMY,

IN ADDITION, GENERALLY HIGHER INFLATION IN THE WORLD LEAST HIGHER PRICES OF BASIC COMMODITIES, INCLUDING THOSE OF OIL PRODUCTS, ARE ALSO CONTRIBUTING.

NOT

HOWEVER, THE FIRMING UP IN THE EXCHANGE VALUE OF THE US DOLLAR,

SHOULD BE DOLLAR,

HAVING THE HONG KONG OF

AND

HENCE THAT STABILISING EFFECT.

SOME

/THE LATEST

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