Consumer Price Indices for July 2020

 

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August 20, 2020 -The Census and Statistics Department of the Hong Kong Special Administrative Region Government released today the Consumer Price Index (CPI) figures for July 2020.

According to the Composite CPI, overall consumer prices fell by 2.3% in July 2020 over the same month a year earlier, after an increase of 0.7% in June 2020. The decrease in July was mainly due to the Government's payment of public housing rentals and waiver of two-thirds of rent for tenants of Group B estates by Hong Kong Housing Society in July 2020. 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 July 2020 was 0.2%, smaller than that in June 2020 (1.2%). The smaller increase in July was mainly due to the decreases in the costs for meals bought away from home and the enlarged decreases in local transport fares.

On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the three-month period ending July 2020 was -1.0%, and that for the three-month period ending June 2020 was 0.0%. Netting out the effects of all Government's one-off relief measures, the corresponding rates of change were -0.3% and 0.0%. 

Amongst the various components of the Composite CPI, year-on-year decreases in prices were recorded in July 2020 for electricity, gas and water (-18.6%); housing (-4.8%); clothing and footwear (-4.7%); transport (-3.7%); durable goods (-3.2%) and meals bought away from home (-1.1%). 

On the other hand, year-on-year increases in the components of the Composite CPI were recorded in July 2020 for food (excluding meals bought away from home) (3.9%), miscellaneous goods (2.3%), miscellaneous services (0.6%) as well as alcoholic drinks and tobacco (0.3%). 

Taking the first seven months of 2020 together, the Composite CPI rose by 1.1% over a year earlier. For the three months ending July 2020, the Composite CPI remained unchanged over a year earlier. For the 12 months ending July 2020, the Composite CPI was on average 1.9% higher than that in the preceding 12-month period.

A Government spokesman said that the underlying consumer price inflation rate eased notably to 0.2% in July as economic conditions remained very weak amid the COVID-19 pandemic. Prices of meals bought away from home turned to a year-on-year decline in July, the first decline since early 2004, as the business environment became even more austere given the recent surge in local COVID-19 infections. Meanwhile, the fall in transportation prices enlarged visibly due to the extra MTR fare rebate starting from the month. Price pressures on many other major CPI components also receded further.

Looking ahead, both external and internal price pressures should remain subdued in the rest of the year amid the weak global and local economic conditions. The Government will continue to monitor the inflation situation and the risk of deflation closely.