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The Census and Statistics Department (C&SD) released today (April 22) the Consumer Price Index (CPI) figures for March 2008. According to the Composite CPI, overall consumer prices rose by 4.2% in March 2008 over a year earlier.
The year-on-year rate of increase in the Composite CPI in March 2008 (4.2%) was significantly lower than that in February 2008 (6.3%). The larger headline inflation rate in February 2008 was attributable to the low base of comparison arising from the waiver of public housing rentals in February 2007, and such effect did not come into play in March 2008.
Meanwhile, the one-off policy measure of rate concession for January to March 2008 continued to carry impact on the CPIs in March 2008 and had lowered their year-on-year rates of increase. Netting out the effect of this factor, the year-on-year rate of increase in the Composite CPI in March 2008 (i.e. the underlying inflation rate) was 5.3%, larger than the corresponding underlying inflation rate in February (5.1%).
The larger underlying inflation rate in March 2008 (5.3%) than in February (5.1%) was due mainly to the enlarged increase in private housing rentals, prices of women's outerclothing and cost of 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 3.8%, 4.4% and 4.4% respectively in March 2008, which compared to 9.9%, 5.2% and 3.9% in February. Netting out the effects of all relevant one-off factors, the year-on-year increases in the CPI(A), CPI(B) and CPI(C) were 5.1%, 5.5% and 5.3% respectively in March 2008, which compared to 5.2%, 5.1% and 4.8% in February.
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 January to March 2008, the average monthly rates of increase in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were 0.4%, 0.4%, 0.4% and 0.3% respectively. The corresponding rates of increase for the 3-month period from December 2007 to February 2008 were all 0.5%. However, it should be noted that these rates of change were affected by the one-off measures implemented only in some months (i.e. rates concession in January to March 2008 but not in November and December 2007; and the Housing Society's rental waiver in February 2008). Netting out the effects of these measures, the corresponding average monthly rates of increase in the Composite CPI, CPI(A), CPI(B) and CPI(C) for the 3-month period from January to March 2008 were 0.7%, 0.8%, 0.7% and 0.6% respectively and for the 3-month period from December 2007 to February 2008 were 0.9%, 1.0%, 0.9% and 0.8% respectively.
Amongst the various CPI components, significant year-on-year increase in prices was recorded for food (excluding meals bought away from home) (17.2% in the Composite CPI and 18.6% in the CPI(A)) in March 2008. Food items showing large price increases were pork (59.1% in the Composite CPI as compared with a year earlier); beef (50.8%); canned meat (44.2%); other meat (29.5%); other fresh sea products (20.3%); eggs (19.4%) and frozen meat (19.4%).
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded for electricity, gas and water (7.1% in the Composite CPI and 7.3% in the CPI(A)); meals bought away from home (5.9% in the Composite CPI and 6.1% in the CPI(A)); miscellaneous goods (5.5% in the Composite CPI and 6.1% in the CPI(A)); clothing and footwear (3.0% in the Composite CPI and 4.5% in the CPI(A)); transport (2.0% in the Composite CPI and 0.1% in the CPI(A)) and alcoholic drinks and tobacco (0.4% in the Composite CPI and 1.1% in the CPI(A)).
On the other hand, year-on-year declines in prices were recorded in March 2008 for durable goods (-3.5% in the Composite CPI and -4.2% in the CPI(A)).
As for housing, the Composite CPI rose by 1.9% over a year earlier but the CPI(A) fell by 1.8%, as affected by the public housing rental cut effective from August 2007 and the rates concession in the first quarter of 2008.
As for miscellaneous services, the Composite CPI rose by 1.4% over a year earlier but the CPI(A) fell by 0.4%. 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.
In the first quarter of 2008, the Composite CPI rose by 4.6% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 5.4%, 4.3% and 3.9% respectively. Netting out the effect of various one-off measures, the Composite CPI, CPI(A), CPI(B), and CPI(C) rose by 4.9%, 4.9%, 5.0% and 4.8% respectively in the first quarter of 2008 over a year earlier.
For the 12 months ended March 2008, the Composite CPI was on average 2.7% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 2.5%, 2.7% and 2.9%. The corresponding increases after netting out the effect of various one-off measures were 3.4%, 3.1%, 3.4% and 3.6% respectively.
Commentary
A Government spokesman said that the decline in headline consumer price inflation from 6.3% in February to 4.2% in March was mainly due to the cessation of the lower base effect that pushed up the February figure. Also, the relief measure of rates concession continued to help lower the inflation rate. Netting out all the relevant one-off effects, underlying consumer price inflation edged up to 5.3% in March from 5.1% in February.
The spokesman also pointed out that the pick-up in inflationary pressure in recent months was largely due to the upsurge in food prices, which was driven by global food inflation. The sustained brisk expansion of local economic activities also added pressure on prices and costs.
The spokesman added that looking ahead, the inflation rate in the coming months will continue to be much affected by food price development. If the current tight supply situation in the international food markets gradually eases later this year or early next year, it would help mitigate the inflationary pressure. Meanwhile, developments in the exchange rates of the US dollar and renminbi as well as local wages and rentals also need to be watched closely. Nevertheless, the various relief measures announced in the 2008-09 Budget and the sustained labour productivity growth should help provide some cushioning effect to inflation.
Further information
The CPIs and year-on-year rates of change at section level for March 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 March 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/Tuesday, April 22, 2008
Issued at HKT 16:15
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