XN000022-1992-11-27 — Page 16

14

FRIDAY, NOVEMBER 27, 1992

ON THE

OTHER HAND, GIVEN THE SUSTAINED RAPID INCREASE IN PRIVATE SECTOR INVESTMENT IN MACHINERY AND EQUIPMENT, THE FORECAST GROWTH RATE IN REAL TERMS OF EXPENDITURE ON MACHINERY AND EQUIPMENT IS RAISED FURTHER UPWARDS FROM 13.9% TO 17.5%.

OVERALL, THE FORECAST GROWTH RATE IN REAL TERMS OF THE GDP IS MAINTAINED AT 5%.

GIVEN THE CAPACITY CONSTRAINTS IN THE LOCAL ECONOMY, THE RAPID INCREASES IN SOME OF THE FINAL DEMAND COMPONENTS ARE BEING SUPPORTED TO A CONSIDERABLE EXTENT BY GREATER IMPORTS, AS DISTINCT

LOCAL

SUPPLY.

FROM

10 ON CONSUMER PRICE INFLATION, GIVEN THE OUTTURN IN THE FIRST

AT 9.5% FOR 1992 MONTHS, THE FORECAST RATE OF INCREASE IN THE CPI(A), AS A WHOLE, SHOULD STILL BE APPLICABLE. SEVERAL FACTORS ARE LIKELY AFFECT THE RATE OF INFLATION IN THE SHORT TERM.

ΤΟ

ON IMPORTED INFLATION, WORLD COMMODITY PRICES HAVE BEEN SOFT SO FAR THIS YEAR AND ARE EXPECTED TO REMAIN SO IN THE COMING MONTHS.

ON THE OTHER HAND, THE WEAKENING OF THE U.S. DOLLAR EARLIER THE YEAR IS BEING REFLECTED IN HIGHER PRICES OF IMPORTS.

ON

IN

THE

IN DOMESTICALLY GENERATED INFLATION, CONTINUED GROWTH ECONOMY CAN BE EXPECTED TO GENERATE A GREATER DEMAND FOR RESOURCES. MOREOVER, HOUSING RENTALS HAVE BEEN RISING MORE RAPIDLY.

RISING WAGES AND SALARIES AMIDST A RELATIVELY TIGHT LABOUR MARKET WILL ALSO ADD TO THE COST OF SERVICE ITEMS WITH A SIGNIFICANT LABOUR CONTENT.

NEVERTHELESS, SUSTAINED INVESTMENT IN MACHINERY AND EQUIPMENT,

WITH THE ARRIVAL OF FOREIGN WORKERS UNDER THE COUPLED

1992 LABOUR OF IMPORTATION SCHEME, SHOULD HELP TO EXPAND THE PRODUCTIVE CAPACITY THE ECONOMY, THEREBY RELIEVING SOME OF THE RESOURCE PRESSURES.

IN IMPORT

THE FORECAST RATE OF INCREASE IN THE GUP DEFLATOR, AS A BROAD 9. 5% ΤΟ OVERALL MEASURE OF INFLATION IN THE ECONOMY, IS RAISED FROM 10%,

EARLIER MAINLY TO TAKE INTO ACCOUNT THE MORE RAPID INCREASE YEAR FOLLOWING AN IMPROVEMENT IN THE TERMS OF TRADE (I.E. PRICES RISING LESS RAPIDLY THAN EXPORT PRICES, WHICH HAD THE INSTANT

LIFTING,

IN EFFECT

NOT LOWERING, THE RATE OF INCREASE OF

GDP

DEFLATOR).

THE

THE

NEVERTHELESS, THE RATE OF INCREASE IN THE GDP DEFLATOR HAS BEEN PRICES AS THE MODEST CHANGE IN IMPORT MODERATING IN RECENT QUARTERS, GRADUALLY FILTERS THROUGH TO THE LOCAL ECONOMY.

THE

THIRD QUARTER

ECONOMIC REPORT 1992 WILL BE ON SALE ON NOVEMBER 27

IN AT THE GOVERNMENT PUBLICATIONS SALES CENTRE

GENERAL POST OFFICE BUILDING, GROUND FLOOR, CONNAUGHT PLACE, CENTRAL, AT $30 A COPY.

/FORECAST FOR