***************************************
The Census and Statistics Department (C&SD) released today (February 22) the Consumer Price Index (CPI) figures for January 2008. According to the Composite CPI, overall consumer prices rose by 3.2% in January 2008 over a year earlier.
The policy measure of rates concession for January to March 2008 has lowered the year-on-year rates of change in the CPIs in January 2008 and would continue to carry impact on the CPIs until March this year. Netting out this one-off factor, the year-on-year increase in the Composite CPI in January 2008 (i.e. the underlying inflation rate) was 4.3%, larger than the corresponding inflation rate in December 2007 (3.8%).
The larger increase in the underlying inflation rate in January 2008 (4.3%) than in December 2007 (3.8%) was due mainly to the enlarged increases in cost of meals bought away from home, prices of fresh vegetables, electricity charge and prices of fresh-water fish.
Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 2.9%, 3.3% and 3.5% respectively in January 2008, which compared to 3.4%, 3.9% and 4.0% in December 2007. Netting out the one-off effect of the rates concession, the year-on-year increases in the CPI(A), CPI(B) and CPI(C) were 4.2%, 4.4% and 4.3% respectively in January 2008.
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 from November 2007 to January 2008, the average monthly rates of increase in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were all 0.2%. The corresponding rates of increase for the 3-month period from October to December 2007 were 0.9%, 1.0%, 0.9% and 0.8% respectively. However, it should be noted that these rates of change were affected by the rates concession implemented only in some months (implemented in September 2007 and January 2008 but not in the months of October, November and December 2007). Netting out the effect of the rates concession, the corresponding average monthly rates of increase in the Composite CPI, CPI(A), CPI(B) and CPI(C) for the 3-month period from November 2007 to January 2008 were 0.5%, 0.6%, 0.5% and 0.5% respectively and for the 3-month period from October to December 2007 were all 0.5%.
Amongst the various CPI components, significant year-on-year increases in prices were recorded for food (excluding meals bought away from home) (15.6% in the Composite CPI and 17.1% in the CPI(A)) in January 2008. Food items showing large price increases were pork (48.2% in the Composite CPI as compared with a year earlier); beef (41.4%); canned meat (34.7%); other meat (22.7%); fresh vegetables (20.1%); frozen meat (18.6%); eggs (18.1%); edible oils (18.0%); rice (17.7%); poultry (17.2%) and other fresh sea products (16.8%).
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded for electricity, gas and water (7.0% in both the Composite CPI and CPI(A)); meals bought away from home (4.8% in both the Composite CPI and CPI(A)); miscellaneous goods (4.1% in the Composite CPI and 4.7% in the CPI(A)); clothing and footwear (1.2% and 1.6% respectively) and alcoholic drinks and tobacco (0.1% and 1.0% respectively).
On the other hand, year-on-year declines in prices were recorded in January 2008 for durable goods (-3.4% in the Composite CPI and -3.5% in the CPI(A)).
As for miscellaneous services, the Composite CPI rose by 1.0% over a year earlier but the CPI(A) fell by 1.0%. 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 housing, the Composite CPI rose by 1.0% over a year earlier but the CPI(A) fell by 2.2%, as affected by the public housing rental cut effective from August 2007 and the rates concession in January 2008.
As for transport, the Composite CPI rose by 0.7% over a year earlier but the CPI(A) fell by 0.5%. 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.
For the 3 months ended January 2008, 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 the 12 months ended January 2008, the Composite CPI was on average 2.1% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 1.4%, 2.3% and 2.8%. Netting out the effect of the one-off measures of the public housing rental waiver in February 2007 as well as the rates concession in April to September 2007 and January 2008, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 3.0%, 2.6%, 3.0% and 3.3% respectively in the 12 months ended January 2008 over the preceding 12-month period.
Commentary
A Government spokesman said that the underlying consumer price inflation went up further in January 2008 mainly due to higher prices of food taken both at home and in restaurants. Yet, the government measure of rates concession provided some relief and helped bring down the headline inflation.
The spokesman pointed out that the recent build-up of inflationary pressures reflected to a certain extent the strong consumption demand supported by the vibrant economic growth over the past few years. From a broader perspective, rising food and energy prices had led to rising inflationary pressures in many parts of the world.
He added that looking ahead, the snowstorms in the Mainland had caused some disruptions in food supply in the latter part of January and would continue to have an impact on food prices in February. Apart from the global food inflation, elevated energy prices, appreciation of the renminbi, and the weakening of the Hong Kong dollar 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 partly offset the upward price pressures.
Further information
The CPIs and year-on-year rates of change at section level for January 2008 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 corresponding time series for the seasonally adjusted CPIs are shown in Table 3. The rates of change in the original and the seasonally adjusted Composite CPI are presented graphically in Chart 1.
Users can download the January 2008 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/Friday, February 22, 2008
Issued at HKT 16:15
NNNN
