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28.
This pattern of growth gives a forecast growth rate.
per cent of GDP for 1988 of
of 58 (12). My forecast leads me to the following conclusions. First, given the tight labour market in 1987 the unemployment rate is likely to remain low this year despite a reduced rate of economic growth. Secondly, the rate
per cs of inflation is expected to average about 70 (13). Thirdly, as total final demand in the economy is likely to rise faster than the supply of output, some of this growth in demand will have to be met by additional imports (14). Thus, our imports are forecast to grow by 9.5%, and our retained imports by slightly
per cent 78 This, coupled with a slight further deterioration in
over 78.
Fer cent
the terms of trade,should result in an increased visible trade deficit, giving further weight to some of the arguments I advanced against revaluation of our currency when I spoke of the
per cent
state of the economy in 1987 a moment ago (15). And lastly, the beaut forecast growth rate of the GDP in money terms is about 13 in 1988. At current prices, per capita GDP would thus reach about $72,000, equivalent to US$9,200.
(12) The forecast growth rates of the various major components of expenditure
on the GDP in 1988 are as follows:
@per cent
Private consumption expenditure Government consumption expenditure Gross domestic fixed capital formation
6.5
5.6
4.0
of which, in building and construction
in plant and machinery
3.8
3.9
Total exports of goods
8.8
Domestic exports
Re-exports
Imports of goods
6.0
12.0
9.5
Net exports of services
Gross domestic product
10.0
5.0
For further details, see '1988 Economic Prospects'
per cont.
per cent
(13) Rate of increase of the CPI(A) 78; of the GDP deflator 7.5.
(14) The forecast growth rate of total final demand (excluding re-exports), at
slightly over 68, is higher than that of GDP, at 50 per cent.
per cent
per cent forecast to increase by 4.58. Compared with (15) Import prices are
corresponding increase of 4.10 for export prices, this would give a The forecast of the deterioration of 0.48 in the terms of trade in 1988. visible trade deficit for 1988 is about $6 billion, equivalent to 1.4 of the total value of imports of goods.
A per cent
Xper cent
a
16
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