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The Census and Statistics Department (C&SD) released today (August 21) the Consumer Price Index (CPI) figures for July 2007. According to the Composite CPI, overall consumer prices rose by 1.5% in July 2007 over a year earlier.
The Budget measure of rates concession for the first two quarters of 2007/08 (i.e. April to September 2007) continued to carry effect on the CPIs in July. Netting out this factor, the year-on-year increase in the Composite CPI was 2.6% in July 2007.
The year-on-year increase in the Composite CPI in July 2007 (1.5%) was larger than that in June (1.3%), due mainly to the enlarged increases in the prices of pork, private housing rentals and the costs for meals bought away from home. In particular, the faster year-on-year increase in the prices of pork, from 13.2% in June to 25.0% in July, contributed to an increase of 0.12 percentage point in the consumer price inflation.
Analysed by sub-index, the year-on-year rates of change in the CPI(A), CPI(B) and CPI(C) were +1.0%, +1.6% and +2.1% respectively in July 2007, which compared to +0.8%, +1.4% and +1.9% respectively in June. Netting out the effect of the rates concession, the year-on-year changes in the CPI(A), CPI(B) and CPI(C) were +2.4%, +2.6% and +2.9% respectively in July.
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 2007, the average monthly rates of change in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were +0.3%, +0.3%, +0.4% and +0.4% respectively. The corresponding rates of change for the 3-month period ended June 2007 were -0.1%, -0.2%, -0.1% and +0.1%.
Amongst the various CPI components, larger year-on-year increase was recorded for food (excluding meals bought away from home) (5.8% in the Composite CPI and 6.1% in the CPI(A)) in July 2007. Food items showing large price increases were pork (25.0% in the Composite CPI as compared with a year earlier); eggs (22.7%); frozen meat (12.4%); other meat (e.g. roasted meat) (9.5%); edible oils (9.1%) and canned meat (9.0%). On the other hand, there were some food items showing year-on-year price decreases in July 2007, including fresh vegetables (-2.8% in the Composite CPI); dairy products (-1.5%) and cereals and cereal preparations (other than rice) (-0.7%). Most other food items registered moderate price increases of 5% or less.
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded for clothing and footwear (5.1% in the Composite CPI and 2.4% in the CPI(A)), meals bought away from home (2.2% in the Composite CPI and 2.0% in the CPI(A)), miscellaneous goods (2.1% in the Composite CPI and 2.3% in the CPI(A)) and miscellaneous services (1.9% in the Composite CPI and 0.6% in the CPI(A)).
On the other hand, year-on-year declines in prices were recorded in July 2007 for durable goods (-4.3% in the Composite CPI and -4.6% in the CPI(A)), electricity, gas and water (-3.0% in the Composite CPI and -3.1% in the CPI(A)) and alcoholic drinks and tobacco (-2.4% in the Composite CPI and -1.4% in the CPI(A)).
As for housing, the Composite CPI rose by 1.2% over a year earlier but the CPI(A) fell by 0.3%, as affected by the rates concession which would last until September this year. However, for transport, the Composite CPI fell by 0.2% over a year earlier but the CPI(A) rose by 0.1%.
Taking the first seven months of 2007 together, the Composite CPI rose by 1.5% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 0.6%, 1.7% and 2.3%. Netting out the effect of the one-off measures of public housing rental waiver in February this year and the rates concession, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 2.5%, 2.2%, 2.4% and 2.8% respectively in the first seven months of 2007 over a year earlier.
For the 3 months ended July 2007, the Composite CPI rose by 1.4% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 0.8%, 1.4% and 1.9% respectively.
For the 12 months ended July 2007, the Composite CPI was on average 1.8% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 1.1%, 1.9% and 2.4%.
Commentary
A Government spokesman pointed out that Hong Kong's inflation remained moderate despite the strong economic growth. The spokesman further explained that headline consumer price inflation remained low in July because of the rates concession which would continue to take effect until September this year. Excluding such effect, underlying consumer price inflation edged up slightly in July, mainly due to the result of higher food prices.
The spokesman believed that the movement of food prices was likely to pose an upside risk to inflation in the near term. Nevertheless, several measures, including the rates concession and the recent cut in public housing rentals, would continue to help to contain headline inflation in the coming months. The spokesman also added that overall inflationary pressures would be somewhat cushioned by sustained labour productivity growth.
Further information
Further details are shown in Tables 1 and 2. The rates of change in the original and the seasonally adjusted Composite CPI are presented graphically in Chart 1.
Users can download the July 2007 issue of the Monthly Report on the Consumer Price Index free of charge at the Website of the C&SD (www.censtatd.gov.hk/products_and_services/ products/publications/index.jsp). Print version of this publication is available for sale at HK$49 per issue. Purchase can be done in person at the Publications Unit of the C&SD (Address : 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel. : 2582 3025) or through mail order by returning a completed order form which can be downloaded from the C&SD's website (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/mail_ordering_of_
publications/index.jsp). Print version of this publication is also available for sale online at the Statistical Bookstore (www.statisticalbookstore.gov.hk) and the Government Bookstore of the Information Services Department (www.bookstore.gov.hk). Print versions if purchased online are offered a discount, at 85% of their original prices.
For enquiries about the CPIs, please contact the Consumer Price Index Section of the C&SD at telephone no. 2805 6403 or email address cpi@censtatd.gov.hk.
Ends/Tuesday, August 21, 2007
Issued at HKT 16:15
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