XN000022-1990-03-07 — Page 19

WEDNESDAY, MARCH 7, 1990

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"THE PRESSURE ON THE CONSTRUCTION INDUSTRY, EVEN BEFORE THE NEW AIRPORT PROJECT REALLY GETS UNDER WAY, WILL THUS CONTINUE TO BE HEAVY," HE SAID.

IN THE LIGHT OF THE FORECASTS OF EXPORTS AND DOMESTIC DEMAND, THE FINANCIAL SECRETARY SAID IMPORTS WERE EXPECTED TO GROW BY 6.4 PER CENT.

"WITH TOTAL EXPORTS FORECAST TO GROW BY 5.7 PER CENT, AND WITH A MODEST IMPROVEMENT IN THE TERMS OF TRADE, WE SHOULD HAVE A SMALL VISIBLE TRADE SURPLUS FOR 1990," HE SAID.

TURNING TO THE INFLATIONARY PRESSURES IN THE ECONOMY, SIR PIERS SAID THIS WAS A MATTER OF CONCERN.

HE POINTED OUT THAT IN THE LABOUR MARKET, THE PERSISTENTLY UNEMPLOYMENT AND UNDEREMPLOYMENT RATES OVER THE PAST COUPLE OF SUGGESTED THAT THERE WAS STILL LITTLE SPARE CAPACITY.

LOW

YEARS

SHORT

"THIS WILL CONTINUE TO RESTRAIN ECONOMIC GROWTH IN THE TERM. ALTHOUGH, AS I HAVE ALREADY COMMENTED, THERE HAVE BEEN SIGNS OF EASING IN THE LABOUR MARKET IN RECENT MONTHS, THE PRESSURE ON WAGES AND SALARIES IS LIKELY TO PERSIST FOR SOME TIME, TI HE SAID.

SIR PIERS EXPECTED THAT THE RATE OF INFLATION WOULD COME "BUT MORE SLOWLY THAN WE WOULD LIKE".

DOWN,

HE FORECAST THE AVERAGE RATE OF INCREASE IN THE CONSUMER PRICE INDEX (A) TO BE 8.5 PER CENT IN 1990, SOMEWHAT LOWER THAN THE 10 PER CENT INCREASE IN 1989.

HE SAID THE AVAILABILITY OF OUTWARD PROCESSING FACILITIES ACROSS THE BORDER MIGHT HAVE CAUSED THE RATE OF INFLATION TO BE LESS RESPONSIVE TO SHIFTS IN EXTERNAL DEMAND.

"THE PROSPECT FOR A SIGNIFICANT REDUCTION IN INFLATIONARY PRESSURES WILL DEPEND, IN LARGE MEASURE, ON LABOUR MARKET CONDITIONS," HE ADDED.

THE FINANCIAL SECRETARY SAID THAT ALTHOUGH THERE HAD BEEN SOME IMPROVEMENT, INFLATION WAS STILL TOO HIGH.

HANDS.

"BUT THE REMEDIES DO NOT REST ENTIRELY IN THE GOVERNMENT'S THE PRIVATE SECTOR CAN DO MUCH TO HELP BY IMPROVING PRODUCTIVITY BOTH THROUGH TRAINING AND THROUGH APPROPRIATE INVESTMENT," HE SAID.

SIR PIERS POINTED OUT THAT IN 1990 AND IN THE YEARS BEYOND. ECONOMIC AND POLITICAL DEVELOPMENTS BOTH GLOBALLY AND WITHIN THE REGION WOULD CONTINUE TO BE THE KEY INFLUENCE ON HONG KONG'S ECONOMIC PROSPECTS.

"WE REMAIN EXPOSED TO MANY UNCERTAINTIES, 'NCERTAINTIES THERE ARE OPPORTUNITIES TO BE GRASPED. #ILL BE THE MEASURE OF OUR SUCCESS, HE SAID.

BUT IN THOSE HOW WE RESPOND

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