TNAG-1269-FCO40-1619-Banking-situation-in-Hong-Kong-1983 — Page 159

economy is not imposing much pressure on aggregate supply of resources and hence on the general price level. As a result of the likely downward revision to the expenditure on

Consolidated Account and the upward revision to the GDP

forecast for 1983, the relative size of the public sector should reduce (for the first time for years) to about 23%, as compared with my budget estimate of 24.1%. But the public sector's share of building and construction output will increase from 50% in 1982 to 56% in 1983, largely as a result of the sharp reduction in private sector building and construction activity. As the growth rate of total exports will exceed that of imports in value terms, the visible trade

There gap will narrow from 10.9% in 1982 to 10.1% in 1983. will also be a narrowing of the combined gap on the visible

and invisible trade account.

24.

But I

that the

Looking into 1984, there are indications world economy will continue to improve. But we cannot and must not overlook the vulnerability of our economy to external factors. Unpredictable economic and political events can

always upset our expectations. The international monetary

is particularly cloudy.

that am confident

the

maintenance of steady and consistent Government policies will ensure that Hong Kong will benefit from further improvement in

the economies of our export markets. If they cease to improve, so will our economy which is almost entirely export

based.

scene

I

25.

Since I finalised this speech there has arisen further concern over the declining value of the HK dollar. believe that the economy of Hong Kong led by export growth is improving rapidly. The depreciation of the HK dollar is thus not principally due to economic factors. It is not possible for the Government to fix the exchange rate of the HK dollar at any particular level. This must depend upon the forces of

10

/the