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APPEARS TO HAVE BEEN SOME EASING IN DOMESTIC INFLATIONARY PRESSURES IN RECENT MONTHS. IMPORT PRICES WERE LARGELY STABLE, WITH DECREASES RECORDED IN SOME INSTANCES. TAKING THE FIRST EIGHT MONTHS OF 1993 TOGETHER, THE AVERAGE INCREASE IN THE CPI(A) WAS 8.5 PERCENT.
ECONOMIC OUTLOOK FOR 1993.
6.
GDP IS FORECAST TO GROW BY 5.5 PERCENT IN REAL TERMS IN 1993, UP FROM 5.3 PERCENT IN 1992. CONTINUED EXPORT-LED GROWTH, DRIVEN MAINLY BY RE-EXPORTS, IS EXPECTED.
7.
DYNAMIC ECONOMIC GROWTH IN THE ASIA-PACIFIC REGION, COUPLED WITH ECONOMIC RECOVERY IN THE UNITED STATES AND THE UNITED KINGDOM, POINTS TO GOOD BUSINESS PROSPECTS FOR THE YEAR. TRADE WITH CHINA, PARTICULARLY THAT RELATED TO INDUSTRIAL PROCESSING ARRANGEMENT, SHOULD CONTINUE TO GROW SOLIDLY IN THE COMING MONTHS. THE TIGHTENING OF RESTRAINT MEASURES BY THE CHINESE GOVERNMENT LATELY IS FOCUSED MAINLY ON EXCESSIVE INVESTMENT AND SPECULATIVE ACTIVITIES AND IS NOT INTENDED TO SUPPRESS OVERALL ECONOMIC GROWTH. A SEVERE SLOW-DOWN IN THE CHINA'S ECONOMY THUS SEEMS UNLIKELY. THE RENEWAL OF CHINA'S MFN STATUS IN THE UNITED STATES FOR ANOTHER YEAR HAS ALSO CLEARED SOME OF THE UNCERTAINTIES IN THE SHORT TERM. RENEWAL OF CHINA'S MEN STATUS IN 1994 AND THEREAFTER STILL REMAINS AN ISSUE OF CONCERN. ALSO OF CONCERN TO HONG KONG AS A CLOSELY
INVOLVED THIRD PARTY ARE THE MARKET ACCESS AND BILATERAL TRADE BALANCE ISSUES BEING PURSUED PRESENTLY BY THE UNITED STATES WITH CHINA.
8 =
CONSUMPTION SHOULD CONTINUE TO GROW STEADILY AGAINST THE BACKGROUND OF FULL EMPLOYMENT AND RISING REAL INCOME. FURTHER CONSIDERABLE GROWTH IN INVESTMENT CAN ALSO BE EXPECTED, GIVEN THE UP-GRADING AND TRANSFORMATION OF THE ECONOMY TOWARDS ACTIVITIES
INVOLVING GRATER SKILL AND A HIGHER LEVEL OF TECHNOLOGY.
9.
THE CONSUMER PRICE INFLATION FORECAST FOR 1993 AS A WHOLE HAS
BEEN REVISED DOWNWARD TO 9.0 PERCENT FROM 9.5 PERCENT AT THE
BEGINNING OF THE YEAR. THERE SHOULD BE SCOPE FOR A FURTHER REDUCTION IF THE IMPACTS FROM THE YEN APPRECIATION AND FROM CHINA'S
INFLATION REMAIN MODEST.
PATTEN
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