H.K. consumer price index falls for 52nd straight month

Asian Economic News, March 25, 2003

HONG KONG, March 21 Kyodo

Hong Kong's composite consumer price index (CPI), the broadest measure of price moves, fell 2.0% in February on the year for the 52nd straight month of decrease, the government said Friday.

The decline was larger than the year-on-year 1.6% decrease in January.

The government said cheaper package tours and transport services, as well as the enlarged drop in private housing rentals had contributed to the bigger decline in CPI.

The waiver of water and sewage charges also put downward pressure on overall consumer prices, the government said in a statement.

In addition, there was a higher base of comparison due to the difference in timing of the Chinese New Year, the government said. The Chinese New Year fell on the beginning of February this year rather than mid-February last year, and thus saw higher seasonal prices in late January this year instead of early February last year.

For the first two months of this year together, the CPI dropped 1.9% from a year ago.

In February, prices of electricity, gas and water saw the biggest year-on-year falls, followed by durable goods, and then by clothing and footwear.

The persistent deflationary spiral has been stifling Hong Kong's economic growth as local consumption and investment sentiment remains weak and the unemployment rate stays high amid the city's economic structuring.