BARRING a global or mainland economic slowdown, Hongkong's inflation rate by the end of the 1993-94 fiscal year will still be in double digits - possibly seriously so. Financial Secretary Hamish Macleod's populist ''go for growth'' Budget will be inflationary for two broad reasons, one of them related to real economic factors, the other psychological. It will be inflationary because it pumps additional money into the economy at a time when Hongkong is running a monetary policy aimed at economic stimulation. The Financial Secretary puts forward some sound reasons why inflation should not increase significantly. First, he says recurrent spending growth in the Budget has been kept in line with inflation and economic growth and this will help moderate the inflationary push inherent in it. Second, he says that part of the additional money flowing to consumers - especially through tax concessions - will be saved and only part of it will be spent, again reducing the inflationary impact. Third, he says that even where money does flow through to consumption, it will merely cause a rise in imports, and imported price inflation is not a problem in Hongkong. Fourth, he says the additional spending on capital works will flow to an already under-utilised construction sector, and because the sector is under-utilised there will be only modest, if any, inflationary impact. As far as the first point is concerned, it is true that recurrent spending is kept in line with inflation and economic growth, with 15.8 per cent nominal spending growth and 5.6 per cent real. But total spending (recurrent and non-recurrent) outlined in the Budget is up a nominal 23 per cent, giving an expected real increase of 12.5 per cent, if the inflation forecast is taken into account. The increase in recurrent spending for the year is a substantial $14.56 billion and the increase in total spending nearly $30 billion. In addition, there are tax concessions made available in the Budget which will inject a further $3.9 billion back into the pockets of those people most likely to spend it. As far as recurrent spending is concerned, the areas targeted for the big increases in growth - health and social services, education and the environment - are more likely to result in spending rather than saving. They are areas where the money is required now and will not to be stored away for some future use. In the third argument, that of additional demand going to imports, it is true that Hongkong relies on imports for satisfying the consumption of consumer goods and that the increases in imports prices have been modest. But right now the big contributors to inflation are housing - with rental costs running at an annual rate of increase of 15 per cent - and services - with annual increases in excess of 13 per cent. Mr Macleod's second Budget will do nothing to halt the price spiral in these two areas and could even worsen it. Mr Macleod's final point is that non-recurrent spending involves mostly capital works and that as the construction industry is under-utilised the higher spending is unlikely to be inflationary. Theoretically this sounds fine, but to put itself back to work fully the construction sector will have to spend money to attract workers, buy equipment, and so on. The business sector is not concerned about inflation merely because of the increased costs and likely wage pressures it will bring - although control of both is vital to Hongkong remaining a competitive place to do business. Business is concerned about the social impact of inflation. For example, it will not take too long for the increases in personal allowances to be eaten up as inflation flows through to wages and pushes people back into paying tax, or into higher tax brackets. These people will then be coming back to the Government, and Mr Macleod in particular, asking for additional relief, especially from wage inflation that thrusts them into higher tax paying positions. Mr Macleod may be merely storing away problems for the future - the real problems with this ''popular Budget'' may only come to light around Budget time next year. It will be interesting to see how the Government handles that. Mr Perkin is Chief Economist at the Hongkong General Chamber of Commerce.