XN000022-1993-11-26 — Page 4

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FRIDAY, NOVEMBER 26, 1993

THE GROWTH IN GROSS DOMESTIC PRODUCT (GDP) IN THE THIRD QUARTER OF 1993 SHOULD HAVE BEEN SLIGHTLY HIGHER THAN 5%.

MEANWHILE, BASED ON THE LATEST INFORMATION CONCERNING CHANGES IN

WOULD STOCKS, THE GDP GROWTH RATE FOR THE FIRST HALF OF THIS YEAR VERY LIKELY HAVE TO BE REVISED UPWARDS FROM THE EARLIER ESTIMATE OF 5.3% TO AROUND 5.5%.

CONSUMER PRICE INFLATION REMAINED GENERALLY STABLE DURING THE THIRD QUARTER OF 1993, WHILE THE LABOUR MARKET TIGHTENED UP SOMEWHAT WITH BOTH THE UNEMPLOYMENT AND UNDEREMPLOYMENT RATES EDGING DOWNWARDS.

THE RECENT DEVELOPMENTS ARE DESCRIBED IN THE THIRD QUARTER ECONOMIC REPORT 1993 RELEASED TODAY (FRIDAY).

THE GOVERNMENT ECONOMIST, MR K Y TANG, SAID FOLLOWING AN ON- GOING PRACTICE, THE ECONOMIC FORECASTS FOR THE CURRENT YEAR HAD BERN REVIEWED AND UPDATED IN PARALLEL WITH THE PREPARATION OF THE BCONOMIC REPORT.

OVERALL, THE FORECAST GROWTH RATE IN REAL TERMS OF THE GDP FOR 1993 IS KEPT UNCHANGED, AT 5.5%.

WHILE THERE WAS A SLOW-DOWN MOST RECENTLY IN THE GROWTH OF EXPORTS AS WELL AS IN SOME OF THE DOMESTIC DEMAND INDICATORS, THIS SHOULD HAVE BEEN ADEQUATELY OFFSET BY A CORRESPONDING REDUCED GROWTH IN IMPORTS.

THE FINAL OUTTURN FOR THE YEAR WILL DEPEND ON THE BALANCE BETWEEN THESE GDP DEMAND COMPONENTS AND THE IMPORT ABSORPTION FACTOR.

ON INFLATION, THE FORECAST RATES OF INCREASE IN BOTH THE CONSUMER PRICE INDEX (A) AND THE GDP DEFLATOR ARE REVISED DOWNWARDS, FROM 9% TO 8.5% AND FROM 9.5% TO 9% RESPECTIVELY, IN THE LIGHT OF THE FIGURES RECORDED SO FAR.

IN THE EXTERNAL SECTOR, TOTAL EXPORTS ROSE BY ABOUT 15% IN REAL TERMS IN THE THIRD QUARTER OVER A YEAR EARLIER.

RE-EXPORTS STILL SHOWED A SIGNIFICANT INCREASE, BY ABOUT 21% IN REAL TERMS IN THE THIRD QUARTER.

BY CONTRAST, DOMESTIC EXPORTS REMAINED WEAK, WITH A DECLINE ABOUT 5% IN REAL TERMS.

OF

RE-EXPORTS

WITH THESE DIFFERENTIAL GROWTH RATES, THE SHARE OF THE VALUE OF TOTAL EXPORTS INCREASED FURTHER, TO 79% IN THE THIRD QUARTER OF 1993 FROM 75% IN THE SAME QUARTER IN 1992.

IN

RE-EXPORTS TO MOST OF THE MAJOR MARKETS REMAINED ROBUST IN THE THIRD QUARTER OF 1993.

GENERALLY

OF

HOWEVER, TOWARDS THE END OF THE QUARTER, THERE WERE SIGNS SLOWING DOWN IN THE GROWTH OF RE-EXPORTS TO THE MAJOR OVERSEAS MARKETS IN NORTH AMERICA AND CONTINENTAL EUROPE.

THE GROWTH RATE OF RE-EXPORTS TO CHINA, THOUGH STILL SIGNIFICANT, ALSO MODERATED SOMEWHAT.

/AS TO