Hong Kong Consumer Prices Rose 1.3% in December

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January 21, 2010 - Hong Kong’s overall consumer prices rose by 1.3% in December 2009 compared to the same month a year earlier, according to the Census and Statistics Department of the Hong Kong Special Administrative Region Government (HKSARG). The rise is higher than the 0.5% increase in November 2009.

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 December 2009 was 0.3%, larger than that in November (-0.3%), mainly due to the increases in the prices of food (excluding meals bought away from home) and charges for package tours, and enlarged year-on-year increase in the prices of motor fuel.

On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the 3-month period from October to December 2009 was 0.8%, which compared to 1.0% for the 3-month period from September to November 2009. 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 October to December 2009 was 0.2%, same as that for the 3-month period ended November 2009.

A HKSARG spokesman says that underlying consumer price inflation turned slightly positive on a year-on-year comparison in December after staying slightly negative for five consecutive months. This indicates that deflationary pressures have by and large receded as the economy continues to recover.

The spokesman adds that inflationary pressures should remain rather modest in the coming months. As the economic recovery, both locally and globally, is still at its early stage, the prevailing excess capacity on the supply side should help to contain the upward pressures on costs and prices.