CONFIDENTIAL # 3
7
reducing the rate of inflation.
In any case land in Hong
Kong is still expensive by world standards. If sustained
for too long, however, this fall
fall could have undesirable
repercussions on the long-term supply of new
property.
The condition of the property market is but one
justification for
Our system of continuous, careful
liquidity of banks and dtc's.
monitoring of the
position is satisfactory.
The
14.
Despite the slower than expected growth rate of
the economy and a fall in the average number of hours
worked, the measured rate of unemployment has risen only
slightly. In March this year at 3.5% it was lower than a
year before when it was 4.1%, and only slightly higher
than the rate in December 1981 of 3.1%. There is, as yet,
no firm evidence that the rate has risen since March,
though a slight increase would not
be surprising.
I
not
In
regard this employment situation as significant
least in comparison with the experience of others.
Hong Kong we reckon that any rate below about 3%
represents full employment. But I acknowledge a degree of
restricted working, with lower earnings for some.
15.
As regards prices, the slowdown in
in the rate of
increase which I forecast in the Budget is occurring. The
increase in the Consumer Price Index between July 1981 and
July 1982 was 11% compared with 15% for the same period a
year earlier.
This marked
downward
trend should
continue. Inflation is a curse, and I am pleased that our
efforts to
G.F. 326
CONFIDENTIAL✯ =
success.
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