H.K. deflation eases further in Nov

Asian Economic News, Dec 29, 2003

HONG KONG, Dec. 22 Kyodo

Hong Kong's composite consumer price index (CPI), the broadest measure of price moves, dropped 2.4% in November on the year for the 61st straight month of fall, the government said Monday.

The year-on-year decline was below the 2.7% decrease in October, indicating a continued improvement of the city's deflationary problem, which has been easing since August.

The government said the fall in overall consumer prices narrowed further in November because some local retailers reduced price discounts and other concessions on their goods and services.

Some other shops, meanwhile, raised their prices modestly amid a pickup in domestic consumer spending and a surge in inbound tourism in recent months, the government said in a statement.

Higher import prices due to the weakening in the U.S. dollar were also believed to have contributed to the smaller CPI decline in November.

For the first 11 months of this year, the CPI fell 2.6% from a year ago.

Late last month, the government revised its CPI forecast for the whole year to a 2.7% fall from an earlier projected decline of 3%.

Financial Secretary Henry Tang said then he expected Hong Kong would be out of its present deflation cycle in 12 to 18 months.