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30.
ECONOMIC AND FINANCIAL SITUATION
(a) State of the Economy and Future Prospects
This is the second year of export-led recovery and the indications are that the growth rate of our economy is going to be stronger than was earlier expected. Once again
economy
the resilience of our competitiveness of our products have
reap
the
benefits of a
revival
in
and the external
enabled Hong Kong to
demand in our export markets, particularly the United States. Domestic exports to China have also increased rapidly, so that China has become Hong Kong's third largest market. This is very much to Our
mutual benefit both economically and in the wider sense. Overall domestic exports for 1984 will probably grow by 18% and, in consequence, Hong Kong's gross domestic product is expected to grow by 8%. These growth rates are very encouraging.
31.
Our export performance has led to a major improvement in the employment situation. In the three months May to July, the unemployment rate was 3.4% and the underemployment rate was 0.9%, indicating that the labour force is fully employed. Higher incomes are reflected in the continuing growth of consumer spending.
32.
The rate of inflation has slowed since the beginning of this year to about 9% at present, and there seem to be good prospects that it will ease further in
further in the coming
months. This is attributable to the combination of
relatively moderate increases in world
in world commodity prices and the stability of the Hong Kong dollar under the linked exchange rate system. Let me make clear that we plans to change that system.
have
ΠΟ
/33. Looking
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