| The outlook for 1997 is cautiously
optimistic. Although growth in 1st Quarter 1997 remained
subdued at 3.8 per cent, this was partly due to the
high base in 1st Quarter 1996.
The semi-conductor industry appears
to have turned around. According to the US Department
of Commerce, inventories of electronic components in
the US have been run down while new orders have risen
by a healthy 17 per cent in the first 5 months of 1997.
Some disk drive companies are experiencing inventory
build-up, with quarterly earnings ending June likely
to be below expectations. This also partially reflects
the traditional summer slow-down in the disk drive industry
in the US and Europe. Overall, however, the disk drive
industry is seeing modest growth with new orders for
computers and office equipment rising by 5.6 per cent
in the first 5 months of this year. As a whole, the
global electronics industry is expected to pick up towards
the end of 1997.
With some exceptions, the regional
economies remain healthy and are expected to improve
with the recovery in the global electronics industry.
The US economy is experiencing unusually strong growth
with low inflation. The EU is also expected to record
good growth whilst the Japanese economy is picking up.
The hand-over of Hong Kong to China has proceeded smoothly.
US-China official relations also appear to have moved
to a more constructive track. This favourable strategic
backdrop will contribute to the continued growth of
the region.
Given these factors, the Ministry
of Trade and Industry has forecast our economic growth
in 1997 to be between 5 to 7 per cent. |
