Hong Kong Consumer Prices Fall 1.5% in July

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August 21, 2009 - Hong Kong’s consumer prices fell by 1.5% in July 2009 compared with the same month a year earlier, according to the Consumer Price Index (CPI) figures released today by the Census and Statistics Department of the Hong Kong Special Administrative Region (HKSAR) Government.

The year-on-year rates of change in the CPIs in July 2009 were affected by various Government's one-off relief measures, in particular the implementation of electricity charge subsidy. Netting out the effects of all Government's one-off relief measures, the year-on-year rate of change in the Composite CPI (i.e. the underlying rate of change) in July 2009 was -0.3%, lower than the corresponding rate of change of 0.4% in June 2009, mainly due to enlarged decrease in food prices and smaller increase in private housing rentals.

On a seasonally adjusted basis, the average monthly rate of change in the underlying Composite CPI for the 3-month period from May to July 2009 was -0.1%, and corresponding rate of change for the 3-month period from April to June 2009 was -0.2%.

A HKSAR Government spokesman says that consumer prices eased further in July as local and external price pressures were both virtually absent. This is part of a global phenomenon, with many other economies around the world already experiencing declines in consumer prices consequential to the global financial tsunami.

The spokesman adds that underlying consumer price inflation is likely to stay slightly negative in the coming months, as local price pressures continue to subside and import prices remain soft. This is all part and parcel of the necessary economic adjustment process to weather the shocks of the global financial crisis and economic recession.

“As the entry of fresh graduates and school leavers into the labor market usually peaks in August, the pressure on employment is expected to be fully reflected in the next two months.”

Mr. Cheung stressed that the Government was very concerned about the employment situation of youngsters. “To strengthen employment support for youth, we have earmarked HK$326 million (US$41.79 million) for enhancing and integrating the Youth Pre-employment Training Program and Youth Work Experience and Training Scheme -the Labor Department’s flagship youth employment programs - to provide youngsters with more flexible and comprehensive employment services. The integrated program is now open for enrolment throughout the year,” he said.

In addition, some 4,400 university graduates have registered so far under the Internship Program for University Graduates since its implementation on August 1.

“I encourage our young people to grasp these opportunities and join the programs that they find suitable so as to enhance their competitiveness and equip themselves,” he said.

Mr. Cheung added that the Government would continue to closely monitor the job creation and employment situation, and canvass suitable vacancies from the market to assist job-seekers.