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The Census and Statistics Department (C&SD) released today (May 22) the Consumer Price Index (CPI) figures for April 2008. According to the Composite CPI, overall consumer prices rose by 5.4% in April 2008 over a year earlier.
The year-on-year rate of increase in the Composite CPI in April 2008 (5.4%) was significantly larger than that in March 2008 (4.2%). However, it should be noted that the headline inflation rate in March 2008 was affected by the government relief measure of rates concession for 2008. As there was no such measure in March 2007, the year-on-year rate of change in the CPIs in March 2008 had been lowered.
On the contrary, rates concession was also implemented in April 2007. Therefore, the headline inflation rate in April 2008 was not affected. Netting out this one-off factor, the year-on-year rate of increase in the Composite CPI in April 2008 (i.e. the underlying inflation rate) was also 5.4%.
The slightly larger increase in the underlying inflation rate in April 2008 (5.4%) than in March (5.3%) was due mainly to the enlarged increases in prices of vegetables and the fuel cost variation charge for towngas.
Analysed by sub-index, the year-on-year rates of increase in the headline CPI(A), CPI(B) and CPI(C) were 5.5%, 5.5% and 5.2% respectively in April 2008, which compared to 3.8%, 4.4% and 4.4% respectively in March. Netting out the effect of the rates concession, the year-on-year increases in the CPI(A), CPI(B) and CPI(C) were 5.5%, 5.5% and 5.3% respectively in April 2008, which compared to 5.1%, 5.5% and 5.3% respectively in March. The larger increase in the year-on-year rate of increase in the underlying CPI(A) was attributable to the enlarged increase in food prices, which had larger impact on the CPI(A).
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 from February to April 2008, the average monthly rates of increase in the seasonally adjusted Composite CPI, CPI(A), CPI(B) and CPI(C) were all 0.6%. The corresponding rates of increase for the 3-month period from January to March 2008 were 0.4%, 0.4%, 0.4% and 0.3%. However, it should be noted that these rates of change were affected by the rates concession implemented only in some months (implemented in January to April 2008 but not in December 2007). Netting out the effect of the rates concession, the corresponding average monthly rates of increase in the Composite CPI, CPI(A), CPI(B) and CPI(C) for the 3-month period from February to April 2008 were 0.6%, 0.7%, 0.6% and 0.6% respectively and for the 3-month period from January to March 2008 were 0.7%, 0.8%, 0.7% and 0.6% respectively.
Amongst the various CPI components, large year-on-year increase in prices was recorded for food (excluding meals bought away from home) (19.4% in the Composite CPI and 21.1% in the CPI(A)) in April 2008. Food items showing large price increases were pork (59.3% in the Composite CPI as compared with a year earlier); beef (51.4%); canned meat (44.5%); other meat (33.0%); edible oils (29.0%); rice (24.5%) and frozen meat (20.2%).
Apart from food (excluding meals bought away from home), year-on-year increases in prices were recorded for electricity, gas and water (8.7% in the Composite CPI and 8.9% in the CPI(A)); meals bought away from home (6.0% in the Composite CPI and 6.4% in the CPI(A)); housing (5.5% in the Composite CPI and 2.3% in the CPI(A)); miscellaneous goods (5.2% in the Composite CPI and 5.8% in the CPI(A)); clothing and footwear (1.4% in the Composite CPI and 2.9% in the CPI(A)) and alcoholic drinks and tobacco (0.2% in the Composite CPI and 1.1% in the CPI(A)).
On the other hand, year-on-year decline in prices was recorded in April 2008 for durable goods (-3.1% in the Composite CPI and -3.7% in the CPI(A)).
As for transport, the Composite CPI rose by 2.0% over a year earlier but the CPI(A) remained unchanged. Affected by the difference in expenditure patterns, the price increase in motor fuel had larger impact on the Composite CPI than on CPI(A), and the decrease in railway fares upon the merger of Mass Transit Railway Corporation and Kowloon-Canton Railway Corporation had smaller impact on the Composite CPI than on CPI(A), thus leading to different movements in the two CPIs.
As for miscellaneous services, the Composite CPI rose by 0.6% over a year earlier but the CPI(A) fell by 0.5%. Also 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), thus leading to different movements in the two CPIs.
Taking the first four months of 2008 together, the Composite CPI rose by 4.8% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 5.4%, 4.6% and 4.3%. Netting out the effect of various one-off measures, the Composite CPI, CPI(A), CPI(B), and CPI(C) rose by 5.0%, 5.0%, 5.2% and 4.9% respectively in the first four months of 2008 over a year earlier.
For the 3 months ended April 2008, the Composite CPI rose by 5.3% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 6.3%, 5.1% and 4.5% respectively. The corresponding increases after netting out the effect of various one-off measures were 5.2%, 5.3%, 5.4% and 5.1% respectively.
For the 12 months ended April 2008, the Composite CPI was on average 3.1% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 2.9%, 3.1% and 3.2%. The corresponding increases after netting out the effect of various one-off measures were 3.6%, 3.4%, 3.7% and 3.8% respectively.
Commentary
A Government spokesman said that the headline Composite CPI inflation of 5.4% in April was the same as the underlying rate because the effect of the rates concession was offset by a similar relief measure in April last year. This was marginally higher than the underlying inflation rate of 5.3% in March.
The spokesman also pointed out that the pick-up in inflationary pressure in recent months was largely due to the upsurge in food prices, which was driven by global food inflation. The sustained strong economic growth also added pressure on prices and costs.
The spokesman added that the inflation outlook is rather uncertain and will hinge much on the movements of food prices in the international markets, which are expected to be volatile. The elevated international oil prices, the exchange rate movements as well as the strength of the local economy are also likely to continue to exert inflationary pressure. Nevertheless, the various relief measures announced in the 2008-09 Budget and the sustained labour productivity growth should help provide some cushioning effect to inflation.
Further information
The CPIs and year-on-year rates of change at section level for April 2008 are shown in Table 1. The time series of movements of CPIs and the corresponding year-on-year rates of change upon removing the effect of one-off measures are shown in Table 2. The corresponding time series for the seasonally adjusted CPIs are shown in Table 3. The rates of change in the original and the seasonally adjusted Composite CPI are presented graphically in Chart 1.
Users can download the April 2008 issue of the Monthly Report on the Consumer Price Index free of charge at the website of the C&SD (www.censtatd.gov.hk/products_and_services/products/publications/index.jsp). Print version of this publication is available for sale at HK$49 per issue. Purchase can be done in person at the Publications Unit of the C&SD (Address: 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.: 2582 3025) or through mail order by returning a completed order form which can be downloaded from the C&SD's website (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/mail_ordering_of_publications/index.jsp). Print version of this publication is also available for sale online at the Government Bookstore of the Information Services Department (www.bookstore.gov.hk).
For enquiries about the CPIs, please contact the Consumer Price Index Section of the C&SD at telephone no. 2805 6403 or email address cpi@censtatd.gov.hk.
Ends/Thursday, May 22, 2008
Issued at HKT 16:15
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