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46.
Despite the depreciation of the Hong Kong dollar, the rate of inflation has remained low, consumer prices increased by an average of 2.6% in
in the first ten months of 1986 over the same period last
year.
47.
As a result of the improved economic performance in recent months the forecast growth rate of the gross domestic product (GDP)
for 1986 was revised upward from 4.5% at
at the time when the budget
for the 1986/87 financial year was announced to 5.6% in
mid-September,
conservative.
the GDP was 0.8%
and even this revised forecast may prove to be
In contrast, in 1985, the estimated growth rate of
(b)
Investment
48.
Capital investment in Hong Kong is mainly undertaken by the
private sector. The role of the Hong Kong Government is largely confined to ensuring the provision of
provision of the necessary infrastructure,
and the preservation of a favourable investment environment within
which private business enterprises can seek to maximise their
returns.
In addition to providing much of the physical
infrastructure, the Hong Kong Government seeks to ensure that
adequate support is provided to investors in the availability of new
industrial technology and of a well-trained and well-educated
workforce.
49.
After declining in the second half of 1985 and in the first
half of 1986,
1986, retained imports of capital goods picked up in the
third quarter of 1986. Of particular note were the retained imports
of industrial machinery for use in the manufacturing sector, which
grew by about 23%
23% in real terms in the first nine months of 1986,
after a decline of 4% in 1985 as a whole.
50.
revival of
In the property market, demand for most types of private
sector property has been strong this year
this year reflecting
interest in property investment
generally. Following a strong
recovery in the property market in 1985, prices and rentals held
firm, while trading in property was active.
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