This is
As a
below their peaks recorded earlier in the year. significant. Moreover in Hong Kong an unemployment rate of about 3% probably indicates effective full employment.
result, I expect that our labour force will shortly start
sharing the benefits of the export-led economic
economic recovery in
the form of higher real wages and earnings.
13.
As regards inflation, the Consumer Price Index (A) rose by 9.3% in the first seven months of this year compared
with the same period last year. This slightly exceeds the increase of 9%, which I forecast in the budget. Bearing in
import prices, depreciation
-
mind that, through its effect on
pushes up the rate of
of inflation, the fall of the Hong Kong
dollar since the beginning of this
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. If the Hong Kong dollar had not depreciated in the past twelve months partly due to confidence factors - the rate of inflation would have
been well below the 11% recorded in 1982. Let me assure my
critics that I am acutely aware of the bane of inflation and rising costs, and that I will do all that I can to contain
them. But Government subsidies are no answer.
measures antipathetic to essential new investment.
14.
Nor are
The economic recession in 1982 has had a lagged
effect on Government revenues, which have also been affected
by the depressed state of the property market. It is too early to estimate accurately the revenue and expenditure outturn for this financial year, but current indications are that both revenue and expenditure will be
will be somewhat lower than
the budget forecasts, resulting in a deficit broadly of the
order provided for. In these circumstances there is no need
to consider Government borrowing, though we have received many
loan offers. I shall not however hesitate to borrow if ever the undertaking of a capital project, which will in itself be
6
/profitable
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