G.F. 326
CONFIDENTIAL #8
13
26.
The implications of the revised GDP forecast for
can
be summarised
as follows.
The
the economy this year
pressure of aggregate demand on the general price level is
likely to ease off. Domestic demand will be the source of
growth of the economy in 1982 rather than export demand,
though I must emphasise that growth which is other
export-led cannot be sustained for long.
the
upward revision
to the
than
As а result of
on expenditure
Consolidated
Account and the downward revision to the GDP forecast for
1982, the relative size of the public sector will increase
to just over 25% as compared with my budget estimate of
an
just below
24%.
will thus The public sector will thus command
increased share
of
available
in resources
the economy.
This
can
be
accepted only
as
short-term a
phenomenon,
it
is
still
the
firm
and medium
because
long-term
objective of the Government to restrain public spending so
as
not
to
frustrate
the
demand for
resources
from
the
private sector. The public sector's share of building and construction output will also increase further from 43% in
1981
to
As
there
appears
to
be
spare
I do
49% in 1982.
capacity in the building and construction industry, not expect the increase in the public sector's share in
effect out
on
private
There will be a narrowing of the visible
expenditure
to
have
a
crowding
sector activity.
trade gap from 11.7% in 1981 to 10.7% in 1982.
A small
narrowing in the combined gap on the visible and invisible
trade account is also envisaged.
CONFIDENTIAL #
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