(2)
ECONOMIC AND FINANCIAL SITUATION
11.
(a) State of the Economy and Medium-term Prospects
Turning now to the economy, developments so far this year indicate that an export-led recovery is underway. Given
no unforeseen external shocks, domestic exports will probably
grow by 11% in real terms and, as a consequence, Hong Kong's gross domestic product is expected to grow by between 51/2%
and 6% in 1983. This is very encouraging and illustrates, once
again, the resilience of our economy and its ability to respond
quickly to
to a revival
revival in demand
demand in our major
our major export markets. Locally, however, both consumer spending and investment have
been relatively weak. Some effects of the 1982 recession linger on, and private sector
sector investment and reinvestment
plant and machinery and
machinery and in building and property have been
affected by anxiety about the future.
12.
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- in
Reflecting the depressed state of the property market,
employment in the building and construction industry has fallen. But the recovery of our exports has created more job
opportunities in manufacturing industries. For the labour
force as a whole, the employment situation has greatly
improved. In the three months May to July this year, the
unemployment rate was 3.9% and the underemployment rate was 1.7%, both substantially below the peaks recorded earlier this
year.
13.
The rate of inflation, as measured by the Consumer
Price Index, is now just over 9% per year. It would have been
much lower had it not been for the depreciation of the Hong Kong dollar over the past twelve months. It must be expected that the recent sharp fall in the value of the Hong Kong dollar
will continue to have an adverse effect on the rate of
inflation for the rest of this year.
5
/14.
The
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