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  Budget Speech
  Economic Performance in 2004

4.     Our economy recovered throughout 2004, moving out of the doldrums that had beset us since the Asian financial crisis.  Last year, it grew by 8.1 per cent, the highest rate in four years and well above the average annual growth rate of 4.8 per cent over the past 20 years.  This suggests that our economy is back on an upward track following the adjustments over the past few years.

Gross Domestic Product

5.     Our external trade in 2004 remained buoyant: total exports of goods and offshore trade both surged by 15 per cent.  The number of visitor arrivals for the year reached an all-time high of 21.81 million.  Private consumption increased significantly, by 6.7 per cent.  Likewise, investment in industrial machinery, after falling for several years, resumed positive growth, with an overall increase of 20 per cent for the year, the highest since 2000.  Property values rebounded, and the number of homeowners with negative equity fell drastically from about 106  000 in the middle of 2003 to around 19 000 at the end of 2004.  The number of bankruptcy petitions also decreased from more than 22  000 in 2003 to about 12  000 in 2004, and was the lowest in four years.

6.    With the economic upturn, the unemployment rate fell steadily from its peak of 8.6 per cent in the middle of 2003 to a three-year low of 6.4 per cent earlier this year. The total employed population rose at a remarkable pace to an all-time high of 3.34 million, up by about 154 000 over the trough in 2003. There was a surge in vacancies across many sectors.

Seasonally-adjusted Unemployment Rate

Total Employment

7.    In July 2004, the deflation that had persisted for nearly six years finally came to an end.  With brisk local consumer demand and vibrant inbound tourism, 2004 has seen a progressive return of local retailers?pricing power.  In the first half of the year, the Composite Consumer Price Index still experienced a 1.3 per cent year-on-year decline, but in the second half of 2004 this reversed to a small increase of 0.5 per cent.  For the year as a whole, the average price decline was only 0.4 per cent.

Composite Consumer Price Index and GDP Deflator




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2004 | Important notices
Last revision date : 16 March, 2005