Hong Kong Consumer Prices Fall 0.9% in June

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July 21, 2009 - Hong Kong’s overall consumer prices fell by 0.9% in June 2009 compared with the same month a year earlier, according to the Consumer Price Index 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 June 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 Composite CPI registered a year-on-year rate of increase (i.e. the underlying inflation rate) at 0.4% in June 2009, smaller than that in May (1.3%).

On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the 3-month period from April to June 2009 was -0.1%. Netting out the effects of all Government’s one-off relief measures, the average monthly rate of change in the underlying Composite CPI for the 3-month period from April to June 2009 was -0.2%. The corresponding rate of change for the 3-month period from March to May 2009 was virtually nil.

A HKSAR Government spokesman says that consumer prices in terms of both the headline CPI and underlying CPI remained on an easing trend, as local wages and rentals continued to adjust to the economic downturn while external price pressures were absent.

The spokesman points out that for the month of June in particular, the year-on-year decline in the headline Composite CPI also reflected the effect of the electricity subsidy which pulled down the year-on-year rate of change in Composite CPI by 1.2 percentage point. Having netted out this effect, the underlying Composite CPI still rose modestly over a year earlier.

The spokesman adds that with the economy still in a weak state and with many of Hong Kong’s trading partners also experiencing price declines, price pressures from both the local and external fronts are likely to subside further in the period ahead. This is all part of a worldwide phenomenon amid the global economic recession.