Inflation due to fall despite January rise

PUBLISHED : Tuesday, 24 February, 1998, 12:00am
UPDATED : Tuesday, 24 February, 1998, 12:00am

A spending surge for the Lunar New Year caused a small rise in inflation during January, but the underlying trend was downward, the Government said yesterday.

Consumer prices, as measured by the composite index, posted a year-on-year increase of 5.4 per cent in January compared with 5.2 per cent the previous month.

The rise was reflected in the Consumer Price Index A - based on the spending of about half of Hong Kong households - up 5.1 per cent compared with 4.8 per cent for December.

A Government spokesman said: 'The prices of many consumer items were subject to a seasonal rise before the Lunar New Year.' He attributed the rises to higher prices for food, package tours and hair-dressing before the festival.

The rate of inflation is expected to continue easing with year-on-year growth of 5.8 per cent compared with 5 per cent last year.

Imported inflation is likely to remain subdued because of the strength of the US dollar, the currency depreciation in East Asia, low inflation in the supplier economies and soft world commodity prices.