TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 161

11.2.87

20.

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Combining the forecast growth rates of the

various components of expenditure gives a forecast growth

rate of GDP for 1987 of just over 6%.

21.

I thus expect 1987 to be a year of more balanced

growth between domestic and external demand.

The

employment situation should continue to be good. Demand

in the economy is likely to remain strong relative to

supply (8).

This, plus the lagged effect of increased

import prices, may give rise to some additional

inflationary pressures. The average rate of increase in

consumer prices is forecast to be about 6%, which is

higher than the corresponding rate of 3.7% in 1986 (9).

The forecast rate of increase in the GDP deflator is about

5.5%.

22.

The forecast growth rate of GDP in money terms.

is about 12% in 1987, implying a current price GDP of

about $330 billion. At current prices, per capita GDP in

1987 should thus be about $58,000, equivalent to US$7,400.

(8)

(9)

The forecast growth rate of total final demand (excluding re-exports), at 7.3%, is higher than that of GDP at 6.2%.

These increases refer to the private consumption expenditure deflator.

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