The finance chief has named the pegged exchange rate, rigid border controls and civil service overstaffing as the main obstacles to an efficient economy. But Financial Secretary Antony Leung Kam-chung said the Government was not preparing to lay off staff and had no plans to remove the currency peg. The Government will announce second quarter gross domestic product figures today, and is expected to slash its full-year growth forecast of three per cent to about one per cent, confirming the economic slowdown. Mr Leung, who has given interviews to several newspapers and TVB, said civil service overstaffing had affected the efficiency of the economy as public expenditure accounted for 23 per cent of GDP. 'We would not lay off staff nor cut their salary, as social stability is of paramount importance at this moment,' Mr Leung told the Tai Kung Pao newspaper. 'Civil servants should raise productivity instead.' On the Hong Kong dollar's peg to the US dollar, Mr Leung said it was an obstacle, but the Government would not abolish it as it would invite speculation on the local currency. On border restrictions, Mr Leung said the flow of passengers, cargo, capital and information from the mainland to Hong Kong was hampered, but that there had been a free flow from Hong Kong to the mainland. But he said the border between the mainland and Hong Kong maintained the independence of SAR Customs regulations. Mr Leung also identified six industries Hong Kong should strive to develop: financial services, tourism, shipping and trade, fashion, film and information technology. The Commercial Daily said a report would be submitted to the Government by the textile and garment sector on the promotion of Hong Kong as an international fashion hub. Mr Leung warned Hong Kong people against becoming frustrated by competition from mainland cities such as Shanghai. 'Hong Kong still enjoys an edge as it has a freely convertible currency and the rule of law,' he told TVB. Mr Leung urged Hong Kong people to update their knowledge in the wake of the economic slowdown. 'With knowledge, you can earn your living if Hong Kong maintains a favourable [economic] environment,' he said. Cecilia So Chui-kuen, president of the Chinese Civil Servants' Association, disagreed there was overstaffing. 'I have reservations. Some departments have a shortage of staff and have difficulties in recruiting staff, such as the grade of landscape architects, because the conditions of service are not attractive enough. We support raising productivity instead of laying off staff or cutting salaries,' she said.