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The Census and Statistics Department (C&SD) released today (October 23) the Consumer Price Index (CPI) figures for September 2008. According to the Composite CPI, overall consumer prices rose by 3.0% in September 2008 over a year earlier.
The year-on-year rates of change in the CPIs in September 2008 were affected by three Government's one-off relief measures, including the Government's payment of three month's public housing rentals, two years' suspension of Employees Retraining Levy and the granting of electricity charge subsidy. These three one-off measures had together lowered the year-on-year rate of increase in the Composite CPI for September 2008 by 3.1 percentage points. Netting out their effects, the year-on-year rate of increase in the Composite CPI in September 2008 (i.e. the underlying inflation rate) was 6.1%.
The underlying inflation rate in September 2008 (6.1%) was slightly smaller than that in August (6.3%), mainly due to the implementation of the free senior secondary education starting from the 2008-09 school year and moderation in year-on-year increase in food prices.
Analysed by sub-index, the year-on-year rates of change in the headline CPI(A), CPI(B) and CPI(C) were -0.3%, 4.0% and 5.4% respectively in September 2008, which compared to 2.2%, 5.5% and 6.0% respectively in August. 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 all 6.1% in September 2008, which compared to 6.6%, 6.4% and 6.1% respectively in August. The larger difference between the change in headline and underlying CPI(A) reflected that the Government's one-off relief measures had larger impacts on the lower expenditure households.
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 July to September 2008, the average monthly rates of change in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were -0.7%, -1.9%, -0.4% and 0.1% respectively. The corresponding rates of change for the 3-month period from June to August 2008 were -0.1%, -0.9%, 0.2% and 0.5%. 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 July to September 2008 were 0.2%, 0.2%, 0.2% and 0.4% respectively, and for the 3-month period from June to August 2008 were 0.5%, 0.4%, 0.5% and 0.5% respectively.
Amongst the various CPI components, large year-on-year increase in prices was recorded for food (excluding meals bought away from home) (14.9% in the Composite CPI and 16.0% in the CPI(A)) in September 2008. Food items showing large price increases were rice (59.3% in the Composite CPI as compared with a year earlier); fresh-water fish (30.1%); edible oils (28.3%); beef (23.0%); pork (22.2%) and canned meat (21.2%).
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded in September 2008 for meals bought away from home (6.2% in the Composite CPI and 6.5% in the CPI(A)); miscellaneous goods (5.8% and 6.5%) and transport (4.0% and 2.4%).
On the other hand, large year-on-year decline in prices was recorded for electricity, gas and water in September 2008 (-30.8% in the Composite CPI and -36.1% in the CPI(A)), as a result of the Government's electricity charge subsidy. Declines were also recorded for durable goods (-1.0% and -1.4%) and alcoholic drinks and tobacco (-0.9% and -0.3%).
As for housing and miscellaneous services, the Composite CPI rose by 2.7% and 0.3% respectively over a year earlier, but the CPI(A) fell by 7.8% and 2.8% 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 free senior secondary education both had larger impacts on the CPI(A), thus leading to different movements in the two CPIs.
As for clothing and footwear, the Composite CPI fell by 0.8% over a year earlier but the CPI(A) rose by 1.3%.
Taking the first nine months of 2008 together, the Composite CPI rose by 5.0% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 4.6%, 5.2% 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%, 5.7%, 5.7% and 5.5% respectively in the first nine months of 2008 over a year earlier.
In the third 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 2.7%, 5.3% and 5.8% respectively. The corresponding increases after netting out the effects of various one-off measures were 6.3%, 6.4%, 6.3% and 6.1% respectively.
For the 12 months ended September 2008, the Composite CPI was on average 4.6% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 4.2%, 4.8% and 4.8%. The corresponding increases after netting out the effects of various one-off measures were 5.1%, 5.0%, 5.2% and 5.1% respectively.
Starting from the next press release to be announced on November 20, seasonal adjustment of the CPI will be performed using the X-12 ARIMA method to replace the current X-11 ARIMA method. X-12 ARIMA method is an update to the X-11 ARIMA method with enhanced modeling and diagnostic capabilities. The X-12 ARIMA has now been a standard method used by statistical offices for performing seasonal adjustment of statistical series in many countries/economies.
Commentary
A Government spokesman said that headline inflation fell notably further in September, as the relief measure of electricity subsidy began to take effect. Underlying inflation edged down in September, mainly reflecting the tapering of local food inflation and the implementation of the free senior secondary education. This was the first decline since mid-2007 when underlying inflation began to pick up.
The spokesman added that looking ahead, the retreat of food and energy prices in the international markets, the recent strength of the US dollar, and weaker demand conditions amidst the global financial tsunami should continue to reduce the upside risks to inflation. The alleviating effects of the Government's relief measures will also help to contain headline inflation in the coming months.
Further information
The CPIs and year-on-year rates of change at section level for September 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 September 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/Thursday, October 23, 2008
Issued at HKT 16:30
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