TNAG-0735-FCO40-939-Policy-objective-for-the-developing-of-Hong-Kong-in-the-1980-1978 — Page 114

18.

To sum up:

in a situation in which those producing

for domestic demand are better able to pass on price increases

to consumers than those producing for export markets - even

allowing for the helpful effects in some markets of the

depreciation of the Hong Kong dollar an excess of demand for,

over supply of, real resources is contributing to the high

growth rate of those components of GDP catering for domestic

demand, namely, private consumption expenditure, Government

consumption expenditure and gross domestic fixed capital

formation (9). However, with the economy as a whole enjoying double-digit growth for the third year running, it is in- escapable that the relatively higher growth rates in those

sectors must slow down so that resources can be made available

to the export sector and the severity of the adverse trade

balance (likely to be of the order of $7 billion in 1978) can

be diminished (10).

(9)

Growth rates (%) in real terms:

1972-76 1977 (average)

1978 (forecast)

Gross domestic product

8.8

11.4

10

Private consumption expenditure

7.9

14.9

13

Government consumption expenditure

9.3

13.3

14

Gross domestic fixed capital formation

6.6

25.7

15

Exports of goods:

8.3

5.4

11

Domestic exports

8.5

5.3

7

Re-exports

7.9

5.6

25

Imports of goods

6.4

7.9

15

(10) Trade balances in $ billion:

1976

1977

1977

1978

(9 months) (9 months)

Exports

41.6

44.8

Imports

43.3

48.7

Balance

1.7

3.9

<

2.6

32.6

35.2

38.0

44.0

- 6.0

10

/ (c)

Adverse