Deflation enters fifth month

Finance | Victor Zhong 22 Dec 2020

Hong Kong recorded its fifth straight month of deflation.

Overall consumer prices fell by 0.2 percent in November over the same month a year earlier - the same as the year-on-year decrease for October, according to the Census and Statistics Department.

Netting out the effects of all the government's one-off relief measures, the year-on-year rate of increase in the composite CPI, or underlying inflation rate, for November was 0.3 percent, marginally smaller than that of October.

November's smaller increase was mainly due to decreases in private housing rentals and smaller increases in the prices of fresh vegetables, said the government in an announcement yesterday.

On a seasonally adjusted basis, the average monthly rate of increase in the Composite CPI for the three months ended November was 0.2 percent, compared to that for the three-month period ended in October, which was 0.9 percent.

The corresponding rates of increase were 0.2 percent and 0.3 percent after Netting out the effects of all Government's one-off relief measures.

Among the various components of the Composite CPI, the price of electricity, gas and water fell by 21.6 percent, while that of clothing and footwear decreased by 5.5 percent.

Meanwhile, durable goods slid by 2.3 percent, while the price of transport fell by 1.9 percent in November.

On the other hand, food, excluding meals bought away from home, increased by 2.8 percent during the same period.

Alcoholic drinks and tobacco went up by 1.6 percent and miscellaneous goods rose 1.3 percent.

The price of meals bought away from home, housing, and, miscellaneous services saw an increase of 1 percent, 0.5 percent and 0.1 percent respectively.

"Looking ahead, overall inflationary pressures are likely to stay very mild in the near term as global and local economic conditions remain clouded by the threat of Covid-19," said a government spokesman.

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