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The Census and Statistics Department (C&SD) released today (March 20) the Consumer Price Index (CPI) figures for February 2008. According to the Composite CPI, overall consumer prices rose by 6.3% in February 2008 over a year earlier.
The year-on-year rates of change in the CPIs in February 2008 were affected by a number of one-off factors, including the waiver of public housing rentals by the Housing Authority and Housing Society for the month of February 2007, the policy measure of rates concession for January to March 2008 and the waiver of public housing rentals by Housing Society for the month of February 2008. While the first factor had led to a low base of comparison and raised the year-on-year rate of increase in the Composite CPI for February 2008 by 2.4 percentage points, the other two factors had together lowered the year-on-year rate of increase by 1.2 percentage points. Netting out the effects of all these one-off factors, the year-on-year rate of increase in the Composite CPI in February 2008 (i.e. the underlying inflation rate) was 5.1%, larger than the corresponding underlying inflation rate in January (4.3%).
The larger increase in the underlying inflation rate in February 2008 (5.1%) than in January (4.3%) was due mainly to the enlarged increases in prices of basic foodstuffs as affected by the snowstorms in the Mainland. Also contributed were the larger increases in cost of meals bought away from home and private housing rentals.
Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 9.9%, 5.2% and 3.9% respectively in February 2008. The larger increase in the headline CPI(A) was mainly attributable to the low base of comparison arising from the waiver of public housing rentals in February last year, which had more significant effect on the CPI(A) as the expenditure weight of public housing rent in this sub-index was larger. 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 5.2%, 5.1% and 4.8% respectively in February 2008, which compared to 4.2%, 4.4% and 4.3% in January.
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 December 2007 to February 2008, the average monthly rates of increase in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were all 0.5%. The corresponding rates of increase for the 3-month period from November 2007 to January 2008 were all 0.2%. 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 and February 2008 but not in October to December 2007; and the Housing Society¡¦s rental waiver in February 2008). Netting out the effect 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 December 2007 to February 2008 were 0.9%, 1.0%, 0.9% and 0.8% respectively and for the 3-month period from November 2007 to January 2008 were 0.5%, 0.6%, 0.5% and 0.5% respectively.
Amongst the various CPI components, significant year-on-year increase in prices was recorded for food (excluding meals bought away from home) (19.5% in the Composite CPI and 21.6% in the CPI(A)) in February 2008. Food items showing large price increases were pork (56.0% in the Composite CPI as compared with a year earlier); beef (49.0%); fresh vegetables (32.7%); canned meat (31.6%); other meat (24.7%); rice (23.4%) and edible oils (20.8%).
Apart from food (excluding meals bought away from home), large year-on-year increases in prices were recorded for housing (9.2% in the Composite CPI and 18.5% in the CPI(A)) which were mainly affected by the low base of comparison arising from the waiver of public housing rentals in February last year. Other sections recording year-on-year increases were electricity, gas and water (7.4% in the Composite CPI and 7.6% in the CPI(A)); meals bought away from home (5.5% in the Composite CPI and 5.8% in the CPI(A)); miscellaneous goods (4.1% in the Composite CPI and 4.7% in the CPI(A)); alcoholic drinks and tobacco (0.9% in the Composite CPI and 1.5% in the CPI(A)) and clothing and footwear (0.6% in the Composite CPI and 1.5% in the CPI(A)).
On the other hand, year-on-year declines in prices were recorded in February 2008 for durable goods (-3.7% in both the Composite CPI and CPI(A)).
As for miscellaneous services, the Composite CPI rose by 1.4% over a year earlier but the CPI(A) fell by 0.5%. 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 1.2% over a year earlier but the CPI(A) fell by 0.3%. 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.
Taking the first two months of 2008 together, the Composite CPI rose by 4.8% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 6.3%, 4.3% and 3.7%. Netting out the effect of various one-off measures, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 4.7%, 4.7%, 4.8% and 4.6% respectively in the first two months of 2008 over a year earlier.
For the 3 months ended February 2008, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 4.4%, 5.3%, 4.2% and 3.8% respectively over a year earlier. The corresponding increases after netting out the effect of various one-off measures were 4.4%, 4.3%, 4.5% and 4.4% respectively.
For the 12 months ended February 2008, the Composite CPI was on average 2.6% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 2.4%, 2.6% and 2.8%. The corresponding increases after netting out the effect of various one-off measures were 3.1%, 2.9%, 3.2% and 3.4% respectively.
Commentary
A Government spokesman said that while the government measure of rates concession continued to provide some relief and mitigation effect, the notable increase in the headline inflation was mainly attributable to the lower base effect arising from the public housing rental waiver by the Housing Authority in February 2007. Netting out all the relevant one-off effects, the underlying consumer price inflation went up from 4.3% in January to 5.1% in February. This rise in underlying consumer price inflation was due mainly to higher food prices amidst the severe snowstorm in the Mainland, while the pick-up in private housing rentals also contributed.
Furthermore, the spokesman pointed out that the 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. And from a broader perspective, inflation has risen in many parts of the world amidst rising food and energy prices.
The spokesman added that looking ahead, the global food price inflation, elevated energy prices, gradual appreciation of the renminbi, and the weakness of the Hong Kong dollar alongside the US dollar will continue to pose upside risks to inflation. Nevertheless, the sustained labour productivity growth should help to contain some of the upward price pressures.
Further information
The CPIs and year-on-year rates of change at section level for February 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 February 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, March 20, 2008
Issued at HKT 16:15
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