ECONOMIC PROSPECTS FOR 1988
25.
a few words about our economic
Economic forecasting is always
I shall now say
prospects for the year ahead. difficult; this year it is made even more
more so by the prevailing climate of uncertainty in the world economy. Subject to this
caveat, I expect 1988 to be a year of consolidation, with a more
balanced pattern of growth between external and domestic demand.
26.
Nevertheless, the demand for Hong Kong's products in
our major overseas markets remains crucial to our overall economic performance. In the United States, the likely setback
in consumer demand carries with
carries with it the expectation of only a
small growth in domestic exports to Our largest Overseas
in
market. And, looking further ahead, the forthcoming exclusion
of Our exports from the US Generalised System of Preferences seems likely to affect adversely our economic performance 1989. Fortunately, the outlook is brighter for our domestic
exports to Japan, the Federal Republic of Germany and the United
Kingdom. And notwithstanding continued import controls, the recent growth trend in our domestic exports to China is still
strong, although some reduction in growth during the course of this year
seems likely as a result of a slower development in
outward processing. Overall, I forecast an increase in domestic
exports of 6%. Re-exports are expected to grow by 12%.
Together these two forecasts result in a forecast growth rate of 9% for total exports.
27.
incomes.
Domestically, private consumption expenditure is
expected to grow more moderately in 1988, although at a higher
rate than that of GDP, largely reflecting the recent rapid
growth in
Capital expenditure on building and
construction is
is expected to rise moderately with most of the
growth attributable to the private sector. Expenditure on plant
and machinery is likewise expected to show only a modest increase, following the substantial growth recorded in 1987.
/28. This
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