TNAG-0621-FCO40-769-Budget-of-Hong-Kong-1977 — Page 27

2580

IMIORITY

EN CLAIR

FM HONG KONG 021000Z

UNCLASSIFIED

HKK 100/2.

TO PRIORITY F C O TELNO 214 OF 2 MARCH

INFO PRIORITY HONG KONG GOVERNMENT OFFICE LONDON, WASHINGTON (FOR

HERMANN), BRUSSELS (FOR BURGESS) AND GENEVA (FOR PEARSON).

•

THE FINANCIAL SECRETARY, IN MOVING THE APPROPRIATION BILL FOR 1977 IN LEGISLATIVE COUNCIL THIS AFTERNOON, MADE THE FOLLOWING

POINTS:

PART I: PRESENT ECONOMIC POSITION

1. THE FOUR YEARS 1973 TO 1976 SPAN A CLEARLY DEFINED CYCLE OF ACTIVITY. REAL GROSS DOMESTIC PRODUCT (1966 PRICES) GREW BY 23% FROM 1973 TO 1976, ALTHOUGH THE GROWTH RATE IN INDIVIDUAL YEARS VARIED FROM 14% IN 1973, TO BETWEEN 2% AND 3% IN 1974 AND 1975, TO AN ESTIMATED 16% IN 1976.

2. THE RECESSION IN HONG KONG WAS RELATIVELY SHORT LIVED. COMPETIT-

IVENESS WAS RESTORED AND THIS CONTRIBUTED TO THE 43% INCREASE

ACHIEVED IN THE VALUE OF EXPORTS IN 1976, TO THE REDUCTION OF UNEMPLOYMENT TO ITS FULL EMPLOYMENT LEVEL OF AROUND 4 1/2% AND TO THE INCREASE IN NOMINAL WAGE RATES BY 16% IN THE YEAR ENDING

SEPTEMBER 1976.

3. THE PRELIMINARY ESTIMATE OF G.D.P. FOR 1976 AT CURRENT MARKET

PRICES IS DOLLLARS 47.1 BILLION WHICH IS 26% HIGHER THAN THE PROVISIONAL ESTIMATE FOR 1975 OF DOLLARS 37.4 BILLION.

THE PRELIMINARY ESTIMATE OF REAL G.D.P. FOR 1976 IS DOLLARS 23.6 BILLION (+16%)

/PART 11: THE