TNAG-1641-FCO40-2288-Budget-of-Hong-Kong-1987 — Page 172

11.2.87

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40.

The

The impact of this policy is clear.

relationship between expenditure and GDP on consolidated

account rose to over 19% in 1982-83 before falling back to

just over 16% by 1984-85. To stabilize the growth rate of

public expenditure has meant containing its share at

around 16% to 17% of GDP. In relation to GDP the share of

public expenditure is an estimated 16.5% for both the

The share is forecast to move

years 1985-86 and 1986-87.

up slightly over the next two years, to just under 17% by

1988-89, in the light of some significant new commitments,

but should begin to fall back thereafter on the assumption

that our control over recurrent spending remains firm.

41.

There is every reason for continued vigilance in

the task of containing the relative size of the public

sector. It is so easy for expenditure to get out of

hand. But given the inevitable volatility of Hong Kong's

economy, externally oriented as it is, it is nevertheless

neither possible nor desirable to lay down a precise year

by year relationship between the growth rate of public

expenditure and the growth rate of GDP. What we have been

achieving so far seems about right.

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