XN000022-1994-08-26 — Page 9

NON-ROUTINE REVISION OF THE GDP ESTIMATES

FRIDAY, AUGUST 26, 1994

IN LINE WITH AN ESTABLISHED INTERNATIONAL PRACTICE TO INTRODUCE MAJOR IMPROVEMENTS ΤΟ THE COMPILATION OF GROSS DOMESTIC PRODUCT ESTIMATES ONCE EVERY FEW YEARS, THE CENSUS AND STATISTICS. DEPARTMENT HAS RECENTLY UNDERTAKEN A NON-ROUTINE REVISION OF THE GDP ESTIMATES OVER THE PAST YEARS.

IN

SO DOING, STRUCTURAL CHANGE IN THE ECONOMY CAN BE BETTER REFLECTED AND NEW OR MORE RELIABLE DATA INCORPORATED TO ENHANCE THE QUALITY OF THE GDP ESTIMATES.

THE

AS A RESULT OF THIS ROUND OF REVISION, BOTH THE LEVEL AND GROWTH RATE OF THE GDP ESTIMATES IN THE MORE RECENT YEARS ARE REVISED UPWARDS.

ON THE GDP LEVEL IN NOMINAL TERMS, IT IS LIFTED BY AN AVERAGE OF 4% EACH YEAR. ON THE GDP GROWTH RATE IN REAL TERMS, IT IS RAISED BY 0.4 OF A PERCENTAGE POINT TO 6.0% IN 1992, 0.3 OF A PERCENTAGE POINT TO 5.9% IN 1993, AND 0.2 OF A PERCENTAGE POINT TO 5.7% IN THE FIRST QUARTER OF 1994.

INCORPORATING THE NON-ROUTINE REVISION, THE GDP GROWTH RATE REAL TERMS IN THE SECOND QUARTER WAS PROBABLY. IN THE REGION OF 5.5 6%.

IN

UPDATED FORECASTS

REVIEWED BY INDIVIDUAL

GDP ESTIMATES.

THE

THE GDP FORECAST FOR 1994 HAS BEEN COMPONENTS BASED ON THE NEWLY REVISED CORRESPONDING PRICE FORECAST HAS ALSO BEEN EXAMINED.

ON

ΤΟ

IN THE EXTERNAL SECTOR, THE FORECAST GROWTH RATE IN REAL TERMS OF RE-EXPORTS IN 1994 IS REVISED TO 15%. THE GROWTH IN RE-EXPORTS IN THE FIRST SEVEN MONTHS OF THE YEAR WAS SLOWER THAN EXPECTED. NEVERTHELESS, A BETTER PERFORMANCE WILL PROBABLY BE ATTAINED IN THE COMING MONTHS. THE EFFECT OF CHINA'S ECONOMIC RESTRAINT MEASURES ITS OWN IMPORT DEMAND AND HENCE ON THE CORRESPONDING RE-EXPORTS CHINA THROUGH HONG KONG IS GRADUALLY BEING ABSORBED. RE-EXPORTS JAPAN AND OTHER ECONOMIES IN THE ASIA-PACIFIC REGION, AS WELL AB TO THE UNITED STATES AND THE UNITED KINGDOM, SHOULD STILL BE ROBUST. IN ADDITION, THE RECENT WEAKENING OF THE HONG KONG DOLLAR IN LINE WITH THE U.S. DOLLAR AGAINST THE JAPANESE YEN AND THE MAJOR EUROPEAN CURRENCIES SHOULD HELP HONG KONG'S EXPORTS TO THE RESPECTIVE MARKETS.

TO

THE FORECAST RATE OF DECLINE IN REAL TERMS IN DOMESTIC EXPORTS IS ADJUSTED TO 4%. NOTWITHSTANDING THE WEAK PERFORMANCE SO FAR, THERE WERE SIGNS OF IMPROVEMENT IN DOMESTIC EXPORTS TO CERTAIN MAJOR MARKETS IN THE MORE RECENT MONTHS. THE EXCHANGE RATE FACTOR SHOULD SIMILARLY HELP.

TAKING DOMESTIC EXPORTS AND RE-EXPORTS TOGETHER, THE GROWTH RATE IN REAL TERMS OF TOTAL EXPORTS IN 1994 IS FORECAST AT 11%.

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