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45,
Except for one or two temporary
aberrations the exchange rate
dollar has remained stable
of the Hong Kong dollar against the US
around the linked rate of HK$7.80 to US$1 during the year However,
reflecting the depreciation of the US dollar, the effective exchange
rate index of the Hong Kong dollar fell from 70.6 in end-December
1985 to 64 8 in end-December 1986.
·
46.
4
Despite the depreciation of the Hong Kong dollar, the rate
inflation has remained low. Consumer prices increased by an average
of 2.7% in the first eleven months of 1986 over the same period last
year.
47.
As a result of the
improved economic performance in recent
of the gross domestic product (GDP)
was
announced
to 5.6% in
months the forecast growth
for 1986 was revised upward from 4. .5% at the time when the budget
for the 1986/87 financial year
mid-September, and even this revised forecast may prove to be
conservative, In contrast,
1985 the estimated growth rate of the
DP was 0.8%
in
(b)
Investment
48.
private
sector
Capital investment in Hong Kong is mainly undertaken by the
The role of the Hong Kong Government is largely
confined to ensuring the 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 overnment seeks to ensure that
adequate support is provided to
is provided to investors in the availability of new
industrial technology and of а well-trained and well-educated
workforce
49.
of
in
the
After declining in the second half 1985 and in the first
half of 1986, retained imports of capital goods picked up
third quarter of 1986. Of particular note were the retained imports
of industrial machinery for use in
the manufacturing sector, which
grew by 23% in real terms
in
the first nine months of 1986, after a
decline of 4% in 1985 as a whole.
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