XN000022-1993-11-26 — Page 10

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FRIDAY, NOVEMBER 26, 1993

RATE IN

COMBINING ALL THESE COMPONENTS, THE FORECAST GROWTH REAL TERMS OF GROSS DOMESTIC FIXED CAPITAL FORMATION IN 1993 IS REVISED DOWNWARDS FROM 7.6% TO 6.6%.

OVERALL, THE FORECAST GROWTH RATE IN REAL TERMS OF THE GDP FOR 1993 IS MAINTAINED AT 5.5%. THE SLOWER GROWTH IN SOME OF THE GDP DEMAND COMPONENTS IS EXPECTED TO BE OFFSET BY A CORRESPONDINGLY SLOWER ABSORPTION OF IMPORTS.

ON CONSUMER PRICE INFLATION, WHILE THERE MAY BE SHORT-TERM VOLATILITIES DUE TO FLUCTUATIONS IN THE PRICES OF FRESH FOOD ITEMS, CONSUMER PRICE INFLATION SHOULD REMAIN BROADLY STABLE IN THE COMING MONTHS.

A NUMBER OF FACTORS ARE CONDUCIVE TO THIS SITUATION.

FIRST, WORLD COMMODITY PRICES HAVE BEEN GENERALLY SOFT IN RECENT MONTHS AND ARE EXPECTED TO REMAIN SO IN THE NEAR FUTURE.

SECONDLY, DESPITE THE ACCELERATED INFLATION IN CHINA SINCE LATTER PART OF LAST YEAR, THE PRICES OF IMPORTS FROM CHINA IN KONG DOLLAR TERMS HAVE GENERALLY BEEN ON THE DECLINE.

THE

HONG

THE SIGNIFICANT DEPRECIATION OF THE RENMINBI EARLIER THIS YEAR SHOULD HAVE HELPED TO KEEP IMPORT PRICES DOWN.

THIRDLY, AGAINST THE SHARP APPRECIATION OF THE JAPANESE YEN, JAPANESE PRODUCERS ARE APPARENTLY KEEPING THE PRICES OF THEIR EXPORTS OF CONSUMER GOODS UNDER RESTRAINT.

FOURTHLY, CAPACITY CONSTRAINTS AND HENCE PRICE PRESSURES IN THE LOCAL ECONOMY ARE BEING ALLEVIATED TO SOME EXTENT BY THE EARLIER INCREASE IN CAPITAL INVESTMENT AND THE RECENT RISE IN OVERALL LABOUR SUPPLY.

GIVEN THE ACTUAL OUTTURN OF AN 8.5% INCREASE IN THE FIRST TEN MONTHS OF THIS YEAR, THE FORECAST RATE OF INCREASE IN THE CPI(A) FOR 1993 AS A WHOLE IS LOWERED FURTHER BY HALF OF A PERCENTAGE POINT, FROM 9% TO B.5%.

CONCURRENTLY, THE FORECAST RATE OF INCREASE IN THE GDP Deflator IS ALSO REVISED DOWNWARDS, FROM 9.5% TO 9%.

THE THIRD QUARTER ECONOMIC REPORT 1993 IS NOW ON SALE AT THE GOVERNMENT PUBLICATIONS CENTRE, GROUND FLOOR, GENERAL POST OFFICE BUILDING, CONNAUGHT PLACE, CENTRAL, AT $36 A COPY.

/GROWTH RATE

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