HK deflation persists amid housing waivers

Finance | Avery Chen 23 Oct 2020

Hong Kong reported deflation for the third consecutive month in September as overall consumer prices fell by 2.2 percent from a year ago, mainly due to the waiver of public housing rentals by the Hong Kong Housing Authority.

This came after a 0.4 percent decline in August and a 2.3 percent drop in July.

Excluding the effects of the government's one-off relief measures, the year-on-year rate of increase in the Consumer Price Index was 0.5 last month, up from 0.1 percent in August, due to growing costs of meals away from home and rising public housing rents.

Among the various components of the composite CPI, prices of electricity, gas and water fell 19.8 percent year-on-year, clothing and footwear dropped 7 percent and housing declined by 5.3 percent.

On the other hand, food prices - excluding meals bought away from home - rose 3.1 percent. Miscellaneous goods increased 1.9 percent, alcoholic drinks and tobacco increased 1.8 percent and meals bought away from home inched up by 0.6 percent.

Looking ahead, overall inflationary pressures should stay mild for the rest of the year as global and local economic conditions remain weak amid the pandemic, a government spokesman said.

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