The Census and Statistics Department (C&SD) released January 22 the Consumer Price Index (CPI) figures for December 2007. According to the Composite CPI, overall consumer prices rose by 3.8% in December 2007 over a year earlier, larger than the 3.4% increase in November.
Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 3.4%, 3.9% and 4.0% respectively in December 2007, which compared to 3.1%, 3.5% and 3.6% in November.
For discerning the latest trend in consumer prices, it is also useful to look at the changes in the seasonally adjusted CPIs. For the 3-month period ended December 2007, the average monthly rates of increase in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were 0.9%, 1.0%, 0.9% and 0.8% respectively. The corresponding rates of increase for the 3-month period ended November 2007 were 0.7%, 0.8%, 0.7% and 0.6%.
Apart from miscellaneous goods (3.9% in the Composite CPI and 4.5% in the CPI(A)); clothing and footwear (2.4% in the Composite CPI and 3.1% in the CPI(A)).
On the other hand, year-on-year decline in prices was recorded in December 2007 for durable goods (-3.8% in the Composite CPI and -4.0% in the CPI(A)).
As for miscellaneous services, the Composite CPI rose by 1.6% over a year earlier but the CPI(A) fell by 0.8%. Affected by the difference in expenditure patterns, implementation of the Pre-primary Education Voucher Scheme had smaller impact on the Composite CPI than on CPI(A), and the increase in charges for package tours had larger impact on the Composite CPI than on CPI(A), thus leading to different movements in the two CPIs.
In the fourth quarter of 2007, the Composite CPI rose by 3.5% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 3.1%, 3.6% and 3.7% respectively. For 2007 as a whole, the Composite CPI was on average 2.0% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 1.3%, 2.2% and 2.7%.
Commentary:
A Government spokesman pointed out that consumer price inflation went up further in December 2007, mainly due to higher food prices particularly the surge in the prices of pork. The pick-up in the charges for package tours around the Christmas holiday, partly attributable to the weakening of the Hong Kong dollar, was another factor. For 2007 as a whole, headline consumer price inflation averaged at 2%, the same as the earlier forecast by the Government.
The spokesman further pointed out that the gradual climbing up of inflationary pressures over the course of last year should be viewed in conjunction with the sustained robust expansion of the local economy and the strength of consumer spending, as well as the similar inflation situations currently being experienced in many parts of the world.
He added that looking ahead, the global food inflation, elevated oil prices, weakening of the US dollar and appreciation of renminbi would continue to pose upside risks to inflation. The recent upward trend in private housing rentals also deserved monitoring. Yet the sustained labour productivity growth should still provide some cushioning effect to the upward price pressures.
