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Contents of press release
The Census and Statistics Department released today (August 21) the Consumer Price Index (CPI) figures for July 2003. According to the Composite CPI, overall consumer prices fell by 4.0% in July 2003 from a year earlier, larger than the 3.1% decrease in June 2003.
2. The enlarged year-on-year decline in the Composite CPI in July was mainly attributable to the downward effect of the rates concession granted by the Government for the third quarter of 2003. This had the effect of lowering the Composite CPI by 0.9 of a percentage point in July 2003 from a year earlier. Discounting such an effect, the Composite CPI should have decreased by virtually the same magnitude in both June and July.
3. Thus with the effect of the rates concession taken aside, changes in the prices of the major commodity items largely balanced themselves out. While accentuated decreases were seen in private housing rentals, transport cost and prices of basic foodstuffs, moderated declines were observed in prices of clothing and footwear, prices of durable goods, and charges for meals at restaurants.
4. The CPI in July continued to be affected by the special one-off rebate of electricity charges granted by a power company and the new fare concessions accorded by some public transport operators, same as the situation in June. Taken together, they were estimated to have lowered the Composite CPI by around 0.3 of a percentage point in both months over a year earlier. As to the waiver of water and sewage charges to be granted by the Government, its effect on the CPI would emerge upon its implementation during August - November.
5. Analysed by sub-index and on a year-on-year comparison, the CPI(A), CPI(B) and CPI(C) fell by 3.6%, 4.1% and 4.5% respectively in July 2003, again exceeding the corresponding decreases of 2.4%, 3.2% and 3.7% in June 2003. The rates concession was estimated to have dampened these three sub-indices by 1.1 percentage points, 0.8 of a percentage point and 0.6 of a percentage point respectively in July 2003.
6. For discerning the latest trend in consumer prices, it is also useful to look at the changes in the seasonally adjusted CPIs. For the 3-month period ended July 2003, the average monthly rates of decrease in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were 0.9%, 1.1%, 0.9% and 0.9% respectively. The corresponding rates of decrease for the 3-month period ended June 2003 were 0.7%, 0.6%, 0.6% and 0.8%.
7. Amongst the various CPI components, housing registered the largest year-on-year decline in prices in July 2003 (-7.7% in the Composite CPI and -6.4% in the CPI(A)). This was followed by durable goods (-7.1% in the Composite CPI and -7.0% in the CPI(A)), clothing and footwear (-4.8% in both the Composite CPI and CPI(A)), miscellaneous services (-4.7% in the Composite CPI and -5.2% in the CPI(A)), transport (-1.7% in the Composite CPI and -2.3% in the CPI(A)), meals bought away from home (-1.6% in the Composite CPI and -1.5% in the CPI(A)), food (excluding meals bought away from home) (-1.4% in the Composite CPI and -1.9% in the CPI(A)), and electricity, gas and water (-1.1% in the Composite CPI and -1.3% in the CPI(A)).
8. On the other hand, the prices of miscellaneous goods showed a year-on-year increase in July (0.7% in the Composite CPI and 0.3% in the CPI(A)), while the prices of alcoholic drinks and tobacco were broadly stable (nil change in the Composite CPI and eased only slightly by 0.1% in the CPI(A)).
9. Taking the first seven months of 2003 together, the Composite CPI declined by 2.5% from a year earlier. Concurrently, the CPI(A), CPI(B) and CPI(C) were down by 2.0%, 2.6% and 2.6% respectively.
10. For the 3 months ended July 2003, the Composite CPI declined by 3.2% from a year earlier. The corresponding decreases in the CPI(A), CPI(B) and CPI(C) were 2.6%, 3.3% and 3.7%.
11. For the 12 months ended July 2003, the Composite CPI was on average 2.7% lower than in the preceding 12-month period. The corresponding decreases in the CPI(A), CPI(B) and CPI(C) were 2.5%, 2.9% and 2.8%.
Commentary
12. A Government Secretariat spokesman noted that overall consumer prices fell more in July than in June, mainly due to the downward effect of the rates concession granted by the Government for the third quarter of this year. Yet netting out such an effect, the Composite CPI was still around 3% lower in July than a year earlier. This showed that even with sentiment improved after SARS, local retailers and service providers generally continued to exercise price restraint so as to foster sales.
Further information
13. Further details are shown in Table 1 (text version)and Table 2 (text version). The rates of change in the original and the seasonally adjusted Composite CPI are presented graphically in Chart 1.(text version)
14. The July 2003 issue of the "Monthly Report on the Consumer Price Index" is now available, in both hardcopy and softcopy (in PDF format), for sale at HK$35. It can be purchased online at the "Statistical Bookstore, Hong Kong" (http://www.statisticalbookstore.gov.hk) or by returning a completed order form which can be downloaded from the website of the Census and Statistics Department (http://www.info.gov.hk/censtatd/eng/prod_serv/forms_index.html). Purchase in person can be made at the Publications Unit of the Department (Address: 19/F, Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.: 2582 3025).
15. For enquiries about the CPIs, please contact the Consumer Price Index Section of the Census and Statistics Department at telephone no. 2805 6403 or email address cpi@censtatd.gov.hk.
End/Thursday, August 21, 2003
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