XN000022-1992-08-28 — Page 2

1

FRIDAY, AUGUST 28, 1992

1.

ECONOMIC SITUATION IN FIRST HALF OF 1992

AND UPDATED FORECASTS OF GDP AND PRICES FOR 1992

THE ECONOMY MAINTAINED ITS GROWTH MOMENTUM IN THE FIRST HALF OF THIS YEAR. THE ROBUST PERFORMANCE OF RE-EXPORTS CONTINUED TO PROVIDE THE KEY IMPETUS TO GROWTH, WHILE DOMESTIC EXPORTS ALSO SHOWED A SLIGHT PICK-UP.

REMAINED

LOCALLY, BOTH CONSUMPTION AND INVESTMENT EXPENDITURES BUOYANT. MEANWHILE, CONSUMER PRICE INFLATION CONTINUED TO MODERATE.

THE GROSS DOMESTIC PRODUCT (GDP) GREW BY AN ESTIMATED 4.7% IN REAL TERMS IN THE FIRST QUARTER OF 1992 OVER A YEAR EARLIER, FOLLOWING AN INCREASE OF 4.2% FOR 1991 AS A WHOLE. THE GROWTH RATE IN SECOND QUARTER WAS PROBABLY IN THE REGION OF 4.5%-5%.

THE

THESE DEVELOPMENTS ARE DESCRIBED IN THE HALF-YEARLY REPORT 1992 RELEASED TODAY.

ECONOMIC

PRACTICE,

THE GOVERNMENT ECONOMIST SAID FOLLOWING THE REGULAR BCONOMIC THE

FORECASTS FOR 1992 HAD BEEN REVIEWED AND UPDATED. AS A RESULT, ADJUSTMENTS ARE MADE TO CERTAIN COMPONENTS, BUT THE FORECAST GROWTH RATE IN REAL TERMS OF THE GDP IS MAINTAINED AT 5%.

MATCHING THIS FORECAST AGAINST THE GDP GROWTH RATE ATTAINED THE FIRST

EXPECTED TWO QUARTERS, IT IMPLIES THAT THE ECONOMY IS GROW SLIGHTLY FASTER IN THE SECOND HALF OF THE YEAR THAN IN THE HALF.

THE

IN

ΤΟ

FIRST

CONSUMER

THE FORECAST INFLATION RATE, IN TERMS OF BOTH PRICE INDEX (A) AND THE GDP DEFLATOR, IS ALSO KEPT UNCHANGED AT 9.5%.

A IN THE

SHOW EXTERNAL SECTOR, DOMESTIC EXPORTS REVIVED TO MODERATE INCREASE OF ABOUT 3% IN REAL TERMS IN THE SECOND QUARTER OVER

QUARTER. A YEAR EARLIER, FOLLOWING VIRTUALLY NO GROWTH IN THE FIRST THE INCREASE IN REAL TERMS IN THE FIRST HALF OF 1992 WAS ABOUT 1%.

THE REVIVAL IN DOMESTIC EXPORTS, NOTWITHSTANDING DOMESTIC DEMAND IN SOME OF THE OVERSEAS MARKETS, WAS ATTRIBUTABLE PART TO AN INCREASED EXTERNAL COMPETITIVENESS OF HONG KONG'S FOLLOWING

DOLLAR ALONG THE DEPRECIATION OF THE HONG KONG U.S. DOLLAR DURING THE LATTER PART OF 1991.

THE

WEAK

IN

WITH

PRODUCTS THE

IN

FURTHER, DOMESTIC SIGNIFICANT DECLINE.

THOSE

THE

CHINA FIRST HALF OF 1992, DOMESTIC EXPORTS TO

REVIVE. WHILE THOSE TO THE UNITED STATES CONTINUED TO EXPORTS TO GERMANY AND THE UNITED KINGDOM SHOWED FURTHER

DECREASES.

TO JAPAN ALSO RECORDED A MODERATE

SURGED BUT

QUARTER

MARKET

1992.

FROM

THE

ΤΟ

CHINA OVERTOOK THE UNITED STATES TO BECOME THE LARGEST FOR HONG KONG'S DOMESTIC EXPORTS IN THE SECOND

OF FURTHER, CHINA'S SHARE IN THE TOTAL DOMESTIC EXPORTS INCREASED 24% IN 1991 TO 27% IN THE FIRST HALF OF 1992. ON THE OTHER HAND, SHARE TAKEN UP BY THE UNITED STATES FELL FURTHER, FROM 27% IN 1991 26% IN THE FIRST HALF OF 1992.

/RE-EXPORTS