The Census and Statistics Department (C&SD) released today (August 22) the Consumer Price Index (CPI) figures for July 2016. According to the Composite CPI, overall consumer prices rose by 2.3% in July 2016 over the same month a year earlier, slightly smaller than the corresponding increase (2.4%) in June 2016. 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 2016 was 2.0%, also slightly smaller than that in June (2.1%), mainly due to the enlarged decreases in the prices of women’s outerclothing and the smaller increases in private housing rentals. 

     On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI for the 3-month period from May to July 2016 was virtually nil, and the corresponding rate of change for the 3-month period from April to June 2016 was -0.3%. Netting out the effects of all Government's one-off relief measures, the average monthly rate of change in the Composite CPI for the 3-month period from May to July 2016 was virtually nil, the same as that for the 3-month period from April to June 2016. 

     Analysed by sub-index, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 2.4%, 2.4% and 2.2% respectively in July 2016, which compared to 2.5%, 2.5% and 2.2% respectively in June. Netting out the effects of all Government's one-off relief measures, the year-on-year rates of increase in the CPI(A), CPI(B) and CPI(C) were 2.0%, 2.0% and 1.9% respectively in July 2016, which compared to 2.2%, 2.2% and 1.9% respectively in June. 

     On a seasonally adjusted basis, for the 3-month period from May to July 2016, the average monthly rates of change in the seasonally adjusted CPI(A), CPI(B) and CPI(C) were virtually nil, 0.1% and virtually nil respectively. The corresponding rates of change for the 3-month period from April to June 2016 were -0.5%, -0.3% and -0.2%.@¡Netting out the effects of all Government's one-off relief measures, the corresponding average monthly rates of change in the seasonally adjusted CPI(A), CPI(B) and CPI(C) for the 3-month period from May to July 2016 were virtually nil, 0.1% and virtually nil respectively, and the corresponding rates of change for the 3-month period from April to June 2016 were -0.1%, virtually nil and -0.1% respectively. 

     Amongst the various CPI components, year-on-year increases in prices were recorded in July 2016 for housing (4.2% in the Composite CPI and 4.0% in the CPI(A)), meals bought away from home (3.3% in the Composite CPI and 3.5% in the CPI(A)), miscellaneous services (2.8% in the Composite CPI and 2.7% in the CPI(A)), alcoholic drinks and tobacco (2.0% in the Composite CPI and 2.7% in the CPI(A)), miscellaneous goods (2.0% in the Composite CPI and 1.8% in the CPI(A)), food (excluding meals bought away from home) (1.9% in the Composite CPI and 1.7% in the CPI(A)) and transport (0.6% in the Composite CPI and 0.5% in the CPI(A)). 

     On the other hand, year-on-year decreases in prices were recorded in July 2016 for durable goods (-5.3% in the Composite CPI and -5.1% in the CPI(A)); clothing and footwear (-4.8% in the Composite CPI and -5.3% in the CPI(A)) as well as electricity, gas and water (-1.5% in the Composite CPI and -1.4% in the CPI(A)). 

     Taking the first seven months of 2016 together, the Composite CPI rose by 2.7% over a year earlier. The corresponding increases in the CPI(A), CPI(B) and CPI(C) were 2.8%, 2.7% and 2.4%. Netting out the effects of all Government's one-off relief measures, the Composite CPI, CPI(A), CPI(B) and CPI(C) rose by 2.5%, 2.6%, 2.4% and 2.2% respectively in the first seven months of 2016 over a year earlier. 

     For the 3 months ended July 2016, the Composite CPI rose by 2.5% over a year earlier, while the CPI(A), CPI(B) and CPI(C) rose by 2.5%, 2.6% and 2.3% respectively. The corresponding increases after netting out the effects of all Government’s one-off relief measures were 2.2%, 2.2%, 2.2% and 2.0% respectively.
 
     For the 12 months ended July 2016, the Composite CPI was on average 2.5% higher than in the preceding 12-month period. The respective increases in the CPI(A), CPI(B) and CPI(C) were 2.7%, 2.5% and 2.2%. The corresponding increases after netting out the effects of all Government's one-off relief measures were 2.4%, 2.6%, 2.4% and 2.1% respectively. 

Commentary

     A Government spokesman said that inflation pressure remained moderate in July, with the underlying inflation rate easing slightly further, mainly reflecting the smaller year-on-year increase in the private housing rental component.

     The spokesman commented further that, looking ahead, underlying inflation will likely stay modest in the near term, given the subdued global inflation, continued feed-through of the earlier softening in fresh-letting residential rentals and tame local cost pressure. Nevertheless, the headline inflation rate will likely pick up temporarily in August 2016 on a year-on-year comparison, as the Government's payment of public housing rentals in August last year created a very low base of comparison. The Government will continue to monitor the inflation developments closely, particularly its impact on the lower-income people.

Further information

     The CPIs and year-on-year rates of change at section level for July 2016 are shown in Table 1. The time series on the year-on-year rates of change in the CPIs before and after removing the effects of one-off measures are shown in Table 2. For discerning the latest trend in consumer prices, it is also useful to look at the changes in the seasonally adjusted CPIs. The corresponding time series on the average monthly rates of change during the latest 3 months for the seasonally adjusted CPIs are shown in Table 3. The rates of change in the original and the seasonally adjusted Composite CPI and the underlying inflation rate are presented graphically in Chart 1.

     More detailed CPI data (including year-on-year comparison, month-to-month comparison, seasonally adjusted data series and the CPIs by the Classification of Individual Consumption According to Purpose (COICOP)) are available in the monthly reports. Users can download the July 2016 issue of the Monthly Report on the Consumer Price Index (www.censtatd.gov.hk/hkstat/sub/sp270.jsp?productCode=B1060001), the time series of CPIs at detailed level (www.censtatd.gov.hk/hkstat/sub/sp270.jsp?productCode=D5600001) and the time series of CPIs at COICOP division level (www.censtatd.gov.hk/hkstat/sub/sp270.jsp?productCode=D5600002) free of charge at the website of the C&SD.

     The new 2014/15-based CPI series, as first announced by the C&SD on April 29, 2016, is compiled on the basis of the expenditure patterns obtained from the Household Expenditure Survey (HES) conducted during October 2014 to September 2015. It replaces the old 2009/10-based series for analysing consumer price changes. To assist data users, the old series will continue to be compiled and published in parallel with the new series until the reference month of December 2016. It is an established practice in Hong Kong for the HES to be conducted and for the CPI series to be rebased once every five years. Both the old and the new series of CPIs have been exhibiting a similar trend in recent months.

     For enquiries about the CPIs, please contact the Consumer Price Index Section of the C&SD at telephone no. 3903 7374 or email address cpi@censtatd.gov.hk.

Ends/Monday, August 22, 2016
Issued at HKT 16:30

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