TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 49

4. AS REGARDS THE STRUCTURE OF THE ECONOMY, THERE HAS RECENTLY BEEN A SHIFT TOWARDS THE TERTIARY (OR SERVICE) INDUSTRIES AND A DECLINE IN THE RELATIVE IMPORTANCE OF THE MANUFACTURING

INDUSTRIES:

1971

1977

PERCENTAGE OF TOTAL LABOUR

FORCE EIMPLYED BY :

A. MANUFACTURING INDUSTRIES

47

44

B. TERTIARY INDUSTRIES

36

39

NET OUTPUT OF THE ECONOMY

REPRESENTED BY :

A. MANUFACTURING INDUSTRIES

30

B. TERTIARY INDUSTRIES

56

26

59

THE GROWTH OF TERTIARY INDUSTRIES HAS BEEN MARKED BY THE

EMERGENCE OF COMMERCIAL AND FINANCIAL BUSINESSES SERVICING THE

SE ASIAN REGION.

PART II: PRESENT ECONOMIC POSITION AND PROSPECTS.

5. THE PRELIMINARY ESTIMATE OF GDP FOR 1977 AT CURRENT MARKET

PRICES IS DOLLARS 54,444 MILLION, WHICH IS 15 PERCENT HIGHER THAN

THE PROVISIONAL ESTIMATE OF DOLLARS 47,329 MILLION FOR 1976. THE PRELIMINARY ESTIMATE OF REAL GDP FOR 1977 IS DOLLARS 26,408 MILLION (PLUS 12 PERCENT).

6. THE FORECAST INCREASE IN REAL GDP FOR 1978 IS 9 PERCENT AND

AT CURRENT PRICES IT IS 17 PERCENT. THIS ASSUMES EXPORTS INCREASING AT 6 PERCENT AND IMPORTS AT 9 PERCENT, PRIVATE CONSUMPTION EXPENDITURE AT 14 PERCENT, AND GROSS DOMESTIC FIXED CAPITAL FORMATION AT 10 PERCENT. SUCH A STRONG GROWTH IS ONLY SUSTAINABLE IN THE MEDIUM AND LONG TERM IF THE GROWTH RATE OF

EXPORTS ADJUSTS TO A CORRESPONDINGLY HIGH RATE.

7. AT 9 PERCENT THE FORECAST INCREASE IN REAL GDP FOR 1978 IS THE SAME AS THE TREND GROWTH RATE BETWEEN 1961 AND 1977, BUT HIGHER THAN WHAT WE ARE LIKELY TO ACHIEVE THROUGH TO THE MID 1980S.

THIS IS ATTRIBUTABLE PARTLY TO GROWING PROTECTIONISM AFFECTING

OUR TEXTILE EXPORTS (WHICH ACCOUNT FOR A HALF OF DOMESTIC EXPORTS) AND PARTLY TO THE SLOW DOWN IN THE GROWTH RATE OF THE POPULATION

OF WORKING AGE.

2

/PART III