THE BUDGET FORECAST OF 7 PERCENT. IMPORTS ARE FORECAST TO GROW BY 8 PERCENT IN REAL TERMS, AS COMPARED WITH THE BUDGET FORECAST OF 7 PERCENT. A NARROWING OF THE VISIBLE TRADE GAP IS EXPECTED.
4. ECONOMIC GROWTH IN 1983 WILL BE EXPORT-LED
BECAUSE DOMESTIC DEMAND IS EXPECTED TO GROW AT A SLOWER RATE THAN EXPORTS. WITHIN DOMESTIC DEMAND, WHILE INVESTMENT DEMAND HAS REMAINED RELATIVELY WEAK IN THE FIRST HALF OF THIS YEAR, CONSUMER DEMAND HAS SHOWN SOME SIGNS OF RECOVERY IN THE SECOND QUARTER. THE FORECAST GROWTH RATE OF PRIVATE CONSUMPTION EXPENDITURE IN REAL TERMS IS REVISED SLIGHTLY UPWARDS, FROM 3 PERCENT IN THE BUDGET TO 4 PERCENT. THE FORECAST GROWTH RATE OF GOVERNMENT CONSUMPTION EXPENDITURE IN REAL TERMS IS ALSO REVISED UPWARDS, FROM 6 PERCENT IN THE BUDGET TO 7 PERCENT.
5. AS REGARDS INVESTMENT DEMAND, THE FORECAST GROWTH RATE
OF GROSS DOMESTIC FIXED CAPITAL FORMATION IN REAL TERMS IS REVISED DOWNWARDS FROM THE BUDGET FORECAST OF 6 PERCENT TO MINUS 1 PERCENT. MAJOR DOWNWARD REVISIONS ARE MADE TO TWO COMPONENTS: PRIVATE SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION IS IS NOW EXPECTED TO DECLINE BY 15 PERCENT IN REAL TERMS, INSTEAD OF BY 2 PERCENT AS FORECAST IN THE BUDGET: AND THE FORECAST GROWTH RATE OF PRIVATE SECTOR EXPENDITURE ON PLANT, MACHINERY AND EQUIPMENTS 1S REVISED DOWNWARDS, FROM 4 PERCENT IN REAL TERMS TO ZERO.
6. THE RECOVERY OF THE XPORT SECTOR HAS CREATED MORE JOB OPPORTUNITIES IN MANUFACTURING INDUSTRIES. BUT REFLECTING THE DEPRESSED STATE OF THE PROPERTY MARKET, EMPLOYMENT IN THE BUILDING AND CONSTRUCTION SECTOR HAS CONTINUED TO FALL. THE SUBSTANTIAL DECLINE IN THE UNEMPLOYMENT AND UNDEREMPLOYMENT RATES (TO 3.9 PERCENT AND 1.7 PERCENT RESPECTIVELY IN THE THREE MONTHS MAY-JULY 1983) FROM THE PEAKS RECORDED EARLIER THIS YEAR INDICATES THAT, FOR THE LABOUR FORCE AS A WHOLE, THE EMPLOYMENT SITUATION HAS GREATLY IMPROVED.
7. AS REGARDS INFLATION, THE CONSUMER PRICE INDEX (A) ROSE BY 9.3 PERCENT IN THE FIRST SEVEN MONTHS OF THIS YEAR COMPARED WITH THE SAME PERIOD LAST YEAR. A NUMBER OF FACTORS, SUCH AS THE MODERATE INCREASE IN WORLD COMMODITY PRICES, AND THE SLOWER GROWTH IN THE MONEY SUPPLY, WERE FAVOURABLE TO A SLOWDOWN IN THE RATE OF INFLATION. HOWEVER, THE SHARP DEPRECIATION OF THE HONG KONG DOLLAR SINCE THE BEGINNING OF THIS YEAR HAS HAD AN ADVERSE EFFECT ON THE RATE OF INFLATION AND WILL HAVE A FURTHER ADVERSE EFFECT DURING THE REST OF THE YEAR.
LINE TO TAKE.
1. THE REVISED FORECAST OF THE GDP GROWTH RATE FOR 1983,
OF BETWEEN 5 1/2 PERCENT AND 6 PERCENT IN REAL TERMS, REPRESENTS THE
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