TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 325

Comment

8. As long as recovery particularly in the USA

is sustained, the Territory can expect to achieve the rather limited growth target of 4% in 1983. As far as prospects for the medium- term are concerned it is important that investment recovers. At constant (1973) prices, investment in private plant and machinery fell by over 6% in 1982. Should this persist, it would be an

and one would hope to see signs

indication that general uncertainty was restricting new investment of this

and diversification into technologically more advanced goods, and that the Territory's dynamic competitiveness could be a thing of the past. The behaviour of the exchange rate insofar as it reflects capital account flows may be a pointer to this during the remainder of the year.

-

end of

By the

the

year

9 June 1983

Nick Hallett

N O Hallett

ESID

WH425B

233 5335

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