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The Census and Statistics Department (C&SD) released today (September 22) the Consumer Price Index (CPI) figures for August 2008. According to the Composite CPI, overall consumer prices rose by 4.6% in August 2008 over a year earlier.
The year-on-year rates of change in the CPIs in August 2008 were affected by the implementation of two new one-off measures. The Government's payment of three month's public housing rentals and the two years' suspension of Employees Retraining Levy as from August 2008 had together lowered the year-on-year rate of increase in the Composite CPI for August 2008 by 1.7 percentage points. Netting out the effects of all these one-off factors, the year-on-year rate of increase in the Composite CPI in August 2008 (i.e. the underlying inflation rate) was 6.3%.
The underlying inflation rate in August 2008 (6.3%) was the same as that in July 2008. In August, the year-on-year increase in food prices moderated. On the other hand, the full-year effect of rental cut for Housing Authority's housing estates as from August last year dissipated in August this year and the increase in private housing rentals enlarged, thus offsetting the impact of the moderation in food prices.
Analysed by sub-index, the year-on-year rates of increase in the headline CPI(A), CPI(B) and CPI(C) were 2.2%, 5.5% and 6.0% respectively in August 2008, which compared to 6.4%, 6.5% and 6.1% respectively in July. Netting out the effects of all one-off measures, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 6.6%, 6.4% and 6.1% respectively in August 2008, which compared to 6.4%, 6.5% and 6.1% respectively in July. The larger difference between the increase in headline and underlying CPI(A) was mainly attributable to the larger impacts of the Government's payment of public housing rentals in August 2008 and the dissipation of the full-year effect of rental cut for Housing Authority's housing estates as from August last year on the CPI(A), as the expenditure weight of public housing rent in this sub-index was larger.
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 June to August 2008, the average monthly rates of change in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were -0.1%, -0.9%, 0.2% and 0.5% respectively. The corresponding rates of change for the 3-month period from May to July 2008 were all 0.6%. However, it should be noted that these rates of change were affected by the one-off measures implemented only in some months. Netting out the effects of all one-off 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 June to August 2008 were 0.5%, 0.4%, 0.5% and 0.5% respectively, and for the 3-month period from May to July 2008 were all 0.6%.
Amongst the various CPI components, large year-on-year increase in prices was recorded for food (excluding meals bought away from home) (17.0% in the Composite CPI and 18.2% in the CPI(A)) in August 2008. Food items showing large price increases were rice (63.6% in the Composite CPI as compared with a year earlier); fresh-water fish (34.1%); beef (33.8%); edible oils (31.5%); canned meat (31.3%); pork (23.8%) and eggs (20.7%).
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded in August 2008 for electricity, gas and water (7.1% in the Composite CPI and 7.3% in the CPI(A)); meals bought away from home (6.4% in the Composite CPI and 6.8% in the CPI(A)); miscellaneous goods (5.4% in the Composite CPI and 6.1% in the CPI(A)); transport (4.0% in the Composite CPI and 2.3% in the CPI(A)) and clothing and footwear (1.4% in the Composite CPI and 3.4% in the CPI(A)).
On the other hand, year-on-year declines in prices were recorded in August 2008 for durable goods (-1.0% in the Composite CPI and -1.6% in the CPI(A)) and alcoholic drinks and tobacco (-0.9% in the Composite CPI and -0.3% in the CPI(A)).
As for housing and miscellaneous services, the Composite CPI rose by 2.2% and 0.8% respectively over a year earlier, but the CPI(A) fell by 8.1% and 1.3% respectively. Affected by the difference in expenditure patterns, the Government's payment of public housing rentals in August to October 2008 and the implementation of the Pre-primary Education Voucher Scheme both had larger impacts on the CPI(A), thus leading to different movements in the two CPIs.
Taking the first eight months of 2008 together, the Composite CPI rose by 5.2% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 5.2%, 5.3% and 5.1%. Netting out the effects of various one-off measures, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 5.6%, 5.6%, 5.7% and 5.4% respectively in the first eight months of 2008 over a year earlier.
For the 3 months ended August 2008, the Composite CPI rose by 5.6% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 4.8%, 6.0% and 6.0% respectively. The corresponding increases after netting out the effects of various one-off measures were 6.3%, 6.3%, 6.4% and 6.0% respectively.
For the 12 months ended August 2008, the Composite CPI was on average 4.5% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 4.4%, 4.6% and 4.5%. The corresponding increases after netting out the effects of various one-off measures were 4.8%, 4.7%, 4.9% and 4.8% respectively.
Commentary
A Government spokesman said that headline inflation went down notably in August, largely on account of the alleviating effects of the Government's relief measures, which will continue to have a favourable impact on headline inflation in the coming months. Underlying consumer price inflation, after a period of continued upsurge since late 2007, also showed signs of stabilising in August, as food inflation tapered notably to offset the enlarged increase in private housing rents.
The spokesman added that looking ahead, the recent easing of food and energy prices in the international markets, coupled with the rebound of the US dollar, should help to ease the pressure from imported inflation. The improvement in labour productivity should also help to contain the domestically-generated price pressure. These favourable factors, if continued, should provide an offsetting force against the faster increase in housing cost due to the earlier surges in local private housing rents. In sum, the upside risks to inflation have receded somewhat, given recent movements of food and energy prices as well as exchange rates.
Further information
The CPIs and year-on-year rates of change at section level for August 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 effects 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 August 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/Monday, September 22, 2008
Issued at HKT 16:31
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