TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 10

CODE 18-77

100/2.

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Reference.......

Mr Thomas

HKD

HONG KONG BUDGET 1987-88

1.

Subzette is LoPS/

12726

based on

I attach a note discussing the budget proposals, and the supporting documentation - economic developments during 1986 and prospects for 1987.

2.

There is little controversial in the budget it has generally been described as cautious or unimaginative. Performance of the economy during 1986, particularly with respect to exports, was more than satisfactory and much better than expected at the time of the 1986 budget. The outlook for 1987 is for slightly lower GDP growth (still a very respectable 6%) with a lower contribution from export growth compensated for by higher domestic demand.

Please let me know if there are any aspects you would like examined in greater detail.

3.

16 March 1987

Nick Hallett

N O Hallett

Economic Advisers WH 426B

270-2727