TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 91

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expenditure is now growing. And it will continue to

grow unabated in the forecast years 1979-80 to 1981-82

since we have taken on open-ended commitments in certain

areas.

1978-79 Draft Estimates

(a)

6.

Overall

Next year's budget will look like this:

Revenue:

Recurrent

Capital

Expenditure:

Recurrent

Capital

Surplus on recurrent account

Deficit on capital account

Overall deficit

$M

$M

8,770(+11)

1,160(-3) 9,930(+9)

7,330(+18)

2,920(+54)

10,250(+26)

1,440

1,760

320

7.

Note: Figures in brackets are the percentage

changes on the projections for 1977-78

shown in paragraph 2 above.

I cannot yet evaluate these figures in terms of the

relative size of the public sector (the GDP forecast for

1978 willnot be finished for at least another ten days) or

the load on the construction industry or the real growth

rate of public expenditure (let alone in terms of their

monetary impact). In money terms, they provide for an

/ increase

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