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The Census and Statistics Department (C&SD) released today (January 22) the Consumer Price Index (CPI) figures for December 2007. According to the Composite CPI, overall consumer prices rose by 3.8% in December 2007 over a year earlier, larger than the 3.4% increase in November.
The larger year-on-year increase in the Composite CPI in December 2007 than in November was mainly due to the enlarged increases in the prices of pork, charges for package tours and costs for meals bought away from home.
Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 3.4%, 3.9% and 4.0% respectively in December 2007, which compared to 3.1%, 3.5% and 3.6% in November.
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 December 2007, the average monthly rates of increase in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were 0.9%, 1.0%, 0.9% and 0.8% respectively. The corresponding rates of increase for the 3-month period ended November 2007 were 0.7%, 0.8%, 0.7% and 0.6%.
Amongst the various CPI components, large year-on-year increase in prices was recorded for food (excluding meals bought away from home) (11.7% in the Composite CPI and 12.4% in the CPI(A)) in December 2007. Food items showing large price increases were pork (42.9% in the Composite CPI as compared with a year earlier); beef (38.8%); canned meat (34.1%); eggs (22.3%); frozen meat (18.1%); other meat (21.8%) and edible oils (16.0%).
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded for electricity, gas and water (5.1% in the Composite CPI and 5.2% in the CPI(A)); housing (4.3% in the Composite CPI and 2.1% in the CPI(A)); meals bought away from home (4.0% in the Composite CPI and 3.9% in the CPI(A)); miscellaneous goods (3.9% in the Composite CPI and 4.5% in the CPI(A)); clothing and footwear (2.4% in the Composite CPI and 3.1% in the CPI(A)) and alcoholic drinks and tobacco (0.1% in the Composite CPI and 1.1% in the CPI(A)).
On the other hand, year-on-year decline in prices was recorded in December 2007 for durable goods (-3.8% in the Composite CPI and -4.0% in the CPI(A)).
As for miscellaneous services, the Composite CPI rose by 1.6% over a year earlier but the CPI(A) fell by 0.8%. Affected by the difference in expenditure patterns, implementation of the Pre-primary Education Voucher Scheme had smaller impact on the Composite CPI than on CPI(A), and the increase in charges for package tours had larger impact on the Composite CPI than on CPI(A), thus leading to different movements in the two CPIs.
As for transport, the Composite CPI rose by 0.5% over a year earlier but the CPI(A) fell by 0.7%. Also affected by the difference in expenditure patterns, the price increase in motor fuel had larger impact on the Composite CPI than on CPI(A), and the decrease in railway fares upon the merger of Mass Transit Railway Corporation and Kowloon-Canton Railway Corporation had smaller impact on the Composite CPI than on CPI(A), thus leading to different movements in the two CPIs.
In the fourth quarter of 2007, the Composite CPI rose by 3.5% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 3.1%, 3.6% and 3.7% respectively.
For 2007 as a whole, the Composite CPI was on average 2.0% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 1.3%, 2.2% and 2.7%.
In 2007, the annual increase in the Composite CPI (2.0%) was mainly attributable to the large increases in prices of basic foodstuffs (7.1%) and private housing rentals (4.0%), which together accounted for 1.7 percentage points in the overall increase. Other commodity/service sections in general recorded small price increases or even decreases which moderated the overall increase. For instance, there were declines in school fees in kindergartens, due to the implementation of Pre-primary Education Voucher Scheme, charges for telecommunications services, and prices of video and sound equipment. The public housing rent also dropped due mainly to the cut in the rentals of Housing Authority¡¦s housing estates as from August 2007.
Moreover, the one-off measures of public housing rental waiver in February 2007 and rates concession in April to September 2007 had lowered the increases in CPIs in 2007. Netting out the effect of these one-off measures, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 2.8%, 2.4%, 2.8% and 3.1% respectively in 2007 over a year earlier.
Commentary
A Government spokesman pointed out that consumer price inflation went up further in December 2007, mainly due to higher food prices particularly the surge in the prices of pork. The pick-up in the charges for package tours around the Christmas holiday, partly attributable to the weakening of the Hong Kong dollar, was another factor. For 2007 as a whole, headline consumer price inflation averaged at 2%, the same as the earlier forecast by the Government.
The spokesman further pointed out that the gradual climbing up of inflationary pressures over the course of last year should be viewed in conjunction with the sustained robust expansion of the local economy and the strength of consumer spending, as well as the similar inflation situations currently being experienced in many parts of the world.
He added that looking ahead, the global food inflation, elevated oil prices, weakening of the US dollar and appreciation of renminbi would continue to pose upside risks to inflation. The recent upward trend in private housing rentals also deserved monitoring. Yet the sustained labour productivity growth should still provide some cushioning effect to the upward price pressures.
Further information
The CPIs and year-on-year rates of change at section level for December 2007 are shown in Table 1. The time series of movements of CPIs and the corresponding year-on-year rates of change upon removing the effect of one-off measures are shown in Table 2. The rates of change in the original and the seasonally adjusted Composite CPI are presented graphically in Chart 1.
Users can download the December 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 Government Bookstore of the Information Services Department (www.bookstore.gov.hk).
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, January 22, 2008
Issued at HKT 16:15
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