Low 1yr base, utilities, booze boost CPI 2.2%
Updated: 2009-11-21 08:38
By Cheng Waiman(HK Edition)
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HONG KONG: Latest government figures showed prices in October went up the fastest in nine months, with the Composite Consumer Price Index (CPI), which measures inflation, rising 2.2 percent over the same period last year and exceeding many economists' forecasts for a lower rate.
Utilities like water and electricity, as well as alcoholic drinks became notably more expensive last month, while durable goods became slightly cheaper.
The October increase was also larger than the 0.5 percent growth in September 2009.
A government spokesman said the notable increase in October inflation was due mainly to the low base in the same month last year atttibutable to the government's payment of public housing rentals and the electricity charge subsidy.
Netting the effects of these one-off measures, the underlying inflation rate remained slightly negative in October as price pressures were virtually absent.
He added the recent stable movements of the underlying CPI on a seasonally adjusted basis suggest that deflationary pressures should be rather contained going forward.
Bloomberg said its survey of 13 economists forecasted a 1 percent increase in CPI, much lower than the figure released Friday.
Hong Kong Monetary Authority Chief Executive Norman Chan told lawmakers on Thursday that inflationary pressure in Hong Kong would not be big in the coming 12 months.
Consumer prices fell by the most in five years in August from a year earlier as unemployment discouraged spending. The city's jobless rate fell to 5.2 percent for the three months ended October 31, as employers started hiring again.
Among the various components, larger increases in prices were recorded in October for electricity, gas and water (26.7%), mainly because some households had used up the full amount of the government's one-off electricity charge subsidy.
Sizeable increases were also recorded for alcoholic drinks and tobacco (22.1% in the Composite CPI); housing (6.1%); clothing and footwear (4.7%); and meals bought away from home (0.7%).
On the other hand, year-on-year declines in prices were recorded in October for durable goods (-2.8%), food (excluding meals bought away from home) (-2.3%) and transport (-2.0%).
Taking the first ten months of 2009 together, the CPI rose by 0.4% over a year earlier.
(HK Edition 11/21/2009 page2)