XN000022-1990-10-16 — Page 7

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TUESDAY, OCTOBER 16, 1990

GOVERNMENT PLAYING ITS PART TO CURB INFLATION

本章

THE

GOVERNMENT HAS BEEN CONSCIOUSLY DOING ITS PART TO CURB INFLATION IN SUCH A WAY THAT ANY MEASURES TAKEN WILL NOT JEOPARDISK OF THE EFFICIENT OPERATION OF THE ECONOMY AND WILL REFLECT A BALANCE THE VARIOUS SECTORAL INTERESTS, THE GOVERNMENT ECONOMIST, MR K.Y. TANG SAID TODAY (TUESDAY).

SPEAKING AT THE ANNIVERSARY SEMINAR ORGANISED BY SURVEY RESEARCH HONG KONG THIS AFTERNOON, MR TANG SAID THE GOVERNMENT WILL CONTINUE TO KEEP A TIGHT GRIP ON PUBLIC EXPENDITURE TO ENSURE THAT

ACTIVITIES AND WILL NOT CROWD OUT THE RESOURCES FOR PRIVATE SECTOR FUEL INFLATION.

"IN THIS REGARD, IT REMAINS OUR OVERALL STRATEGY TO KEEP PUBLIC NOT EXPENDITURE IN LINE WITH THE SIZE AND GROWTH OF THE ECONOMY, AND

BY MERELY

ΤΟ REFERENCE

THE AMOUNT OF MONEY

AT AVAILABLE GOVERNMENT'S DISPOSAL, HE STRESSED.

THE

NO

MR TANG POINTED OUT THAT THE CURRENT HIGH INFLATION RATE IS DOUBT

MATTER A

OF CONCERN, BUT THIS IS

NOT PERHAPS

ALTOGETHER UNEXPECTED GIVEN THE PRESSURES ON CAPACITY THAT HONG KONG HAS EXPERIENCED FOR QUITE SOME TIME.

"THE HIGH GROWTH RATE IN 1986 TO 1988 HAS CONTRIBUTED

DIRECTLY

TO THESE PRESSURES.

"THE MARKET PROCESSES SUGGEST THAT, IN DUE COURSE, THE HIGHER PRICES AND WAGES WILL WORK THROUGH ΤΟ RESTRAIN DEMAND FOR OUR RESOURCES BOTH LOCALLY AND EXTERNALLY AND BRING IT TO A BETTER BALANCE WITH THE AVAILABLE SUPPLY," HE EXPLAINED.

CONTINUING

IN

THE HOWEVER,

STRUCTURAL

IN CHANGE

HONG KONG '9 ECONOMY,

RESULTING IN A GREATER ORIENTATION AWAY FROM MANUFACTURING TOWARDS

INDUCEMENTS THE SERVICE SECTORS, REQUIRES PRICE AND WAGE THE MARKET IN ORDER THAT RESOURCES WILL READILY SHIFT ACROSS MR TANG SAID.

SECTORS,

"MOREOVER, MANY OF THE SERVICES IN THE LOCAL MARKET ARE NOT EXPOSED TO FOREIGN COMPETITION BECAUSE THEY ARE NOT BEING TRADED INTERNATIONALLY.

"THE SECTORAL INFLATIONARY PRESSURES THUS MAINTAINED RESULT IN A HIGHER

TO INFLATION RATE OVERALL, AND THIS SITUATION IS EXPECTED LAST FOR SOME TIME, HE ADDED.

++

TOUCHING ON THE IMPACT OF RECENT INCREASES IN OIL PRODUCT PRICES, MR TANG POINTED OUT THAT THE INCREASES GENERATED ADDITIONAL INFLATIONARY PRESSURES WHICH TEND TO OFFSET THE TENDENCY TOWARDS LOWER INFLATION FOLLOWING THE SLOW-DOWN IN ECONOMIC GROWTH.

"THE ADDITIONAL INFLATIONARY IMPACT FROM THE OIL PRICE HIKE WILL PROBABLY TAKE SOME TIME TO FILTER THROUGH COMPLETELY.

/"BUT EVEN