XN000022-1990-05-25 — Page 6

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FRIDAY, MAY 25, 1990

* A SOFTENING OF COMMERCIAL PROPERTY RENTALS;

* RECENT DEVALUATION OF THE RENMINBI AND A RELATIVELY WEAKER YEN, AS THE CURRENCIES OF TWO MAJOR SUPPLIERS OF HONG KONG'S RETAINED IMPORTS;

* STABLE WORLD COMMODITY PRICES; AND

* A SLOW-DOWN IN THE GROWTH RATES OF THE LOCAL MONEY SUPPLY AND

OF DOMESTIC LOANS AND ADVANCES THAT HAS TAKEN PLACE FOR SOME

TIME.

"IN THESE CIRCUMSTANCES, IT WAS CONSIDERED THAT THE FORECAST RATE OF INCREASE IN THE CPI(A) SHOULD BE MAINTAINED AT 8.5 PER CENT, MR TANG SAID.

"A FURTHER REVIEW OF THE SITUATION WILL BE CARRIED OUT IN AUGUST, HE SAID.

"

"IT SHOULD BE NOTED THAT AN ANNUAL FORECAST OF 9.5 PER CENT FOR THE CPI(A) WOULD IMPLY NO FURTHER EASING, WHILE AN ANNUAL FORECAST OF 10 PER CENT OR MORE WOULD IMPLY A RE-ACCELERATION OF INFLATION.

"BOTH APPEAR UNLIKELY IN THE LIGHT OF THE TREND IN RECENT QUARTERS AND OF THE FACTORS MENTIONED ABOVE.

FLOOR,

THE FIRST QUARTER ECONOMIC REPORT 1990 WILL BE ON SALE TOMORROW

AT THE GOVERNMENT PUBLICATIONS CENTRE, GROUND (SATURDAY)

GPO BUILDING, CONNAUGHT PLACE, CENTRAL AT $23 A COPY.

/FORECAST FOR