TNAG-1762-FCO40-2516-Economic-situation-in-Hong-Kong-1988 — Page 4

CODE 18-77

Inflation

Reference

5.

Inflation continues on an upward trend.

The year on year rate for CPI (A) in September wawsw 8.8%. The usual historial comparison (that current inflation is relatively low) is conspicuous by its absence. It is still true, but clearly has less appeal as inflation has been moving steadily upwards for two years. As I indicated in my minute to you of 20 October, a study of Criplatcor in Hong Kong on my list of priorities

is

Domestic demand

6.

while

Again, as in the half year report, retained imports of consumer goods and

retail sales are showing conflicking evidence on This may be further evidence that domestic demand is being met increasingly by domestic production.

domestic demand.

15 December 1988

MA 2ADF

лаці

M Wright

Economic Advisers

WH 426D 270 2728