THE economy steamed ahead in the first half, recording robust growth as gross domestic product rose by about 5.7 per cent in real terms. The Census and Statistics Department estimated that GDP rose 5.7 per cent in the first quarter and between 5.5 and six per cent in the second quarter. This compared with growth of 6.4 per cent for the first half of last year, and 5.5 per cent for the second half. The department forecasts GDP growth for the year at 5.7 per cent. Its half-yearly economic report, issued yesterday, says that in overall terms the economy is expected to grow at a steady pace throughout the year. The report also shows that exports are picking up. Total exports rose 12 per cent for the second quarter compared with eight per cent in the first quarter. For the first half, total exports grew about 10 per cent. This compared with growth of 19.1 per cent in the first quarter last year, and 11.8 per cent in the second quarter in 1993. Overall re-exports continued to provide the key impetus to overall export growth, rising 14 per cent in the first half. That compared with growth of 25.6 per cent in the first quarter last year, and 18 per cent in the second quarter. In the first two quarters this year, while the growth in re-exports to Britain and Japan was sustained, growth to China, the United States and Germany was slower than in the preceding quarters. Domestic exports fell about five per cent for the first half, although there was improvement in the second quarter, when domestic exports to Japan, Singapore and the US returned to positive growth and the declines in domestic exports to the mainland and Britain contracted. Imports rose about 12 per cent for the first half, with accelerating growth rates from the first to second quarter. That was due mainly to a revival in retained imports which rose by 18 per cent in the second quarter after four per cent growth in the first. The report says this pick-up should have favourable implications for domestic demand and domestic exports in the coming months. The visible trade deficit in the first half was equivalent to eight per cent of the value of imports. It was higher than the first half last year, when it was five per cent of the value of imports. But the continued surplus on the invisible trade account should have more than offset the deficit on the visible trade account to yield a combined surplus. Inflation, as measured by the Consumer Price Index (A), moderated to an average of 7.5 per cent in the first half, compared with 8.5 per cent for both the first and second quarters last year. This year it rose 7.7 per cent in the second half and 7.3 per cent in the first half. Externally induced inflationary pressures, especially sharply higher prices for vegetables because of the floods in southern China, lifted consumer price inflation last month. Along with sustained marked increases in housing rentals and prices of various consumer services, the inflation rate is likely to edge higher in the second half, says the report. The forecast growth rate in the Consumer Price Index (A) for this year is 8.5 per cent. Locally, demand for goods and services was underpinned by growth in consumer spending, particularly for the first quarter, and by intensive construction activity on major infrastructure projects. There was also a pick-up in investment spending on machinery and equipment. Retained imports of consumer goods picked up further to rise 15 per cent for the second quarter, after an increase of nine per cent in the first quarter and a decline of two per cent for the fourth quarter last year. For the first half, retained imports of consumer goods rose about 12 per cent. Retail sales volume also rose by eight per cent. Overall employment showed a further increase in the first half. The labour market remained tight with sustained strong demand for labour. Both the unemployment and under-employment rates drifted lower. On investment spending, retained imports of capital goods staged a revival in recent months. Eleven per cent growth was recorded in the second quarter, following zero growth in the first quarter. Overall employment showed a further increase in the first half. Both the unemployment and under-employment rates drifted lower. The seasonally adjusted unemployment rate stood at 1.9 per cent in the second quarter. 0.3 of a percentage point lower than in the preceding quarter and in the same quarter last year.