Hong Kong Consumer Prices Rise 0.8% in February

For more information, please contact:
Melissa Ng / David Hsieh at 212-752-3320
Daniel McAtee at 202-238-6360
Wing Yan Tong at 415-835-9315

March 20, 2009 - Hong Kong’s overall consumer prices rose by 0.8% in February 2009 compared to 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 Government.

The year-on-year rates of change in the CPIs in January and February 2009 were affected by the timing of the Lunar New Year, which fell in January this year but in February last year. Taking the first two months of 2009 together to neutralize the effect of the Lunar New Year, the Composite CPI increased by 2.0% compared to a year earlier. On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the 3-month period from December 2008 to February 2009 was -0.2%.

The year-on-year rates of change in the CPIs in January and February 2009 were also 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 increase in the Composite CPI (i.e. the underlying inflation rate) in February 2009 was 2.1%. Taking the first two months of 2009 together to remove the distortion caused by the difference in the timing of the Lunar New Year between the two years, the underlying inflation rate was 3.3%, smaller than that in December 2008 (4.6%). The smaller increase was largely due to the moderation in year-on-year increases in food prices and 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 December 2008 to February 2009 was -0.2%, and that for the 3-month period from November 2008 to January 2009 was virtually nil.

A Government spokesman said that the easing trend in consumer price inflation in the first two months of 2009 was evident both from the year-on-year increase and the month-to-month rate of change in the seasonally adjusted series. The spokesman explained that this reflected the flexibility of local costs and prices to adjust in response to the economic downturn.

The spokesman expects inflationary pressure in Hong Kong to recede further over the course of 2009, as the local economy comes under the increasing impact of the deepening global recession.