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but the public sector's share of building and construction
output would increase from 50% to 56% largely as a result of the
sharp reduction in private sector building.
3. Sir J Bremridge made the following amendments
his budget forecasts (in real terms where appropriate):
to
Item
Budget forecast
Revised forecast
a) Rate of inflation
+98
b) Growth rate of GDP
+48
+11%
+5-6%
c) Domestic exports
+5%
+11%
d) Re-exports
+12%
+9%
e) Total exports
+78
+10%
f) Total imports
+78
+88
g) Private consumption expenditure
+38
+48
h) Expenditure on plant, machinery
+48
and equipment
i) Gross domestic fixed capital
formation
+6%
-18
Comment
4.
Generally the purely economic signs are encouraging for Hong
Kong, except that the reduced forecast for gross domestic fixed
capital formation does not bode well for the territory's middle-term
prospects. Sir J Bremridge's speech was very much on the lines
expected from the trends in Hong Kong's half-yearly Economic Report, but it did contain some interesting points. For the first time, he did not entirely rule out the abolition of the 10% withholding tax
on Hong Kong dollar deposits, but professed to have an "open mind" on the subject. He also referred to "possible new measures to improve our control of the money supply", which at present is
minimal. That would be important if the Government is to do
anything to limit inflation. This is forecast to rise and could be
further affected if the Hong Kong dollar falls further. Mr Hoare
has minuted separately on that (not copied to others).
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