TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 229

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Introduction

CHAPTER 1: OVERALL VIEW

1.1

Although a revised forecast

of the likely growth

rate in real terms of the gross domestic product in 1983 is

not yet available, the performance of the economy in the first

half of the year indicates that an export-led recovery is

already on its way and that the growth rate of the GDP for

1983 will show an improvement on last year, and possibly on

the budget estimate.

Exports and domestic demand

1.2

With the gradual revival in consumer

revival in consumer demand in Hong Kong's major markets, particularly the United States and the Federal Republic of Germany, domestic exports began to recover in the first quarter of this year. The recovery gathered momentum in the second quarter, so that,

that, comparing the first

half of 1983 with the first half of last year, the growth rate

reached an estimated 9% in real terms (paragraph 2.1). Helped

by trends in internal costs including property prices and

rentals (paragraph 6.9) and wages (paragraph 4.3)

which are

favourable

international

in

terms

of Hong Kong's

-

competitiveness, the export sector has again demonstrated its

ability to respond quickly to a revival in external market

demand. This is despite the increases in interest rates

during the second quarter (paragraph 3.10) and the higher import prices (paragraph 6.3) resulting from the depreciation

of the Hong Kong dollar (paragraph 3.14). Given that the growth rate in real terms of retained imports of raw materials

and semi-manufactures picked up rapidly in the second quarter

of this year (paragraph 2.12) and that the volume of orders

held by a selection of large manufacturers continued to improve (paragraph 5.3), it is likely that domestic export performance will remain strong in the coming months.

1

/1.3 Domestic