Hong Kong's Consumer Price Index Up 1.3% in April

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May 21, 2007 - Hong Kong's overall consumer prices rose 1.3% in April 2007 over a year earlier, smaller than the 2.4% increase in March, according to the Composite Consumer Price Index (CPI) statistics released today by the Census and Statistics Department of the Hong Kong Special Administrative Region Government.

The smaller year-on-year increase in the Composite CPI in April 2007 than in March was mainly attributable to the Budget measure of rates concession for the first two quarters of 2007/08 (i.e. April to September 2007).

A Government spokesman pointed out that the smaller rate of consumer price inflation in April was due to the rates concession, which would continue to carry impact on consumer price inflation until September this year. Discounting this effect, the rate of increase in the Composite CPI in April was the same as that in March at 2.4%, which was still moderate. The higher charges for package tours in April were effectively offset by the moderating rise in food prices and the decline in towngas charges. In sum, the underlying inflationary pressures were still largely kept in check.

The spokesman foresaw that the sustained rapid growth in labor productivity was likely to provide some cushioning to overall inflationary pressures. On top of this, the Budget measure of rates waiver until September this year and other one-off measures will continue to keep the headline inflation down in the coming months.