TNAG-0629-FCO40-777-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 108

2

Why not

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COMPILETITIAL B

14

1977, very high public and private cxpenditure on

building and construction is another contributing

factor. As a result, despite domestic exports in the

first half of the year at only 3% higher in real

terms than a year ago, manufacturing wages were still

increasing. But as the growth in the economy in the

long run must depend on exports, the situation in 1977

is not sustainable. slowed down growth in exports in

1977 will lower the growth in consumption expenditure

in 1978 and this is likely to coincide with a fall off

in private demand for building and construction activity.

The inability of domestic exports to grow as a result

follos

of restrictive limits, would thus be particularly damaging.

:

/6.

CCNFIDENTIAL W 75

t