XN000022-1990-03-07 — Page 15

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WEDNESDAY, MARCH 7, 1990

THE FINANCIAL SECRETARY DREW MEMBERS' ATTENTION TO THE FACT THAT THIS YEAR THE ESTIMATES WERE PUBLISHED EARLIER THAN USUAL TO ASSIST MEMBERS IN THEIR PREPARATION FOR THE SPECIAL MEETINGS OF THE FINANCE COMMITTEE.

WAS

SIR PIERS ALSO POINTED OUT THAT THIS YEAR THE BUDGET SPEECH FOCUSSED UPON THE PROGRAMME OF EXPENDITURE AND ON HOW IT SHOULD BE MANAGED AND FINANCED.

PERIOD OF ECONOMIC CONSOLIDATION INEVITABLE

*

HONG KONG'S GROSS DOMESTIC PRODUCT (GDP) RECORDED A GROWTH RATE OF ONLY 2.5 PER CENT IN REAL TERMS IN 1989, COMPARED WITH INCREASES OF AROUND 14 PER CENT IN 1987 AND SEVEN PER CENT IN 1988, THE SECRETARY, THE HON SIR PIERS JACOBS, SAID TODAY IN PRESENTING BUDGET.

FINANCIAL

HIS

IN REVIEWING THE ECONOMY IN 1989, SIR PIERS SAID A PERIOD CONSOLIDATION WAS PERHAPS INEVITABLE, AND IN SOME RESPECTS WELCOME.

HE NOTED THAT THE ECONOMY CONTINUED TO SLOW DOWN ADJUSTING TO THE PRESSURES ON CAPACITY BROUGHT ABOUT BY GROWTH OVER THE PREVIOUS THREE YEARS.

OF

IN 1989. SUBSTANTIAL

REDUCED OVERSEAS DEMAND FOR HONG KONG'S PRODUCTS, AS WELL AS THE AUSTERITY PROGRAMME IN CHINA, ALSO CONTRIBUTED TO THE CYCLICAL DOWN.

SLOW-

"WITH THE UNEMPLOYMENT RATE STAYING BELOW TWO PER CENT FOR THREE SUCCESSIVE YEARS, WAGES AND SALARIES HAVE BEEN DRIVEN UP BY THE COMPETITION

KEEN FOR MANPOWER, AND THIS HAS CONTRIBUTED TO A DOMESTICALLY GENERATED INFLATION WHICH IS UNCOMFORTABLY HIGH.

LEVEL OF

WAS SOME LESS OF JOB

"IN THE LATTER PART OF LAST YEAR, HOWEVER, THERE INDICATION THAT CONDITIONS IN THE LABOUR MARKET WERE TIGHT,

BECOMING IN THAT THERE WAS A SIGNIFICANT DROP IN THE NUMBER VACANCIES IN MOST SECTORS, HE SAID.

AS A AROUND 10

ON THE CONSUMER PRICE INDICES, SIR PIERS SAID FOR 1989 WHOLE, THE CONSUMER PRICE INDEX (A) ROSE BY AN AVERAGE OF PER CENT.

BUT THERE WERE SIGNS THAT INFLATIONARY PRESSURES, DOMINATED MUCH OF THE YEAR, MIGHT NOW BE EASING AS A ECONOMIC SLOW-DOWN.

RESULT OF THE

"THE YEAR-ON-YEAR RATES OF INCREASE IN THE CONSUMER

TO LEVEL OFF IN THE SECOND HALF OF THE

INDICES STARTED PEAKING IN JUNE.

WHICH

PRICE

YEAR,

AFTER

"BUT THE ADJUSTMENT PROCESS WILL TAKE TIME.' HE SAID.

/IN THE