TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 44

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means that Hong Kong does not have to

not

indeed could

correct an adverse balance of payments situation by

exchange rate adjustments.

19.

So much for the past. I must now try to

answer the question: what influence can the four historical

determinants I have just analysed be expected to exercise

in the future?

II Future Prospects

Progress and Development

20.

Over the next decade, Hong Kong's population is

expected to grow at about the same rate as in the past ten

years, that is, by about 20%.

This means that the gross

domestic product, in real terms, will need to continue

growing at about 7% per annum on average if per capita income is to increase at the average rate of about 5% per

annum achieved in recent years. This is a formidable

rate of growth but it is one which I believe is possible.

Population Growth

21.

Although a population growth rate of something

of the order of 2% per annum will help generate a need for

a continuing rapid rate of expansion of the economy in order

that the present rate of growth of real income per capita can be maintained, it can also be expected to provide a

supply of additional labour sufficient to meet the demand

for it which a growth rate of about 7% would generate.

And this is even after allowance is made for declining

activity rates which could be consequential upon the

/increasing affluence.....