CPI hits 2-year low as rent and food pressure eases

PUBLISHED : Saturday, 23 May, 1998, 12:00am
UPDATED : Saturday, 23 May, 1998, 12:00am

Hong Kong's headline inflation rate declined last month compared with March to hit a two-year low, after food price rises slowed and growth in housing rentals fell.

Consumer price index (A) - the SAR's broadest measure of inflation based on the 50 per cent of households spending between $4,000 and $15,999 a month - rose 4.4 per cent year-on-year last month.

This was the lowest year-on-year increase recorded during the past two years and represented a decline of 0.4 percentage point from 4.8 per cent in March.

Meanwhile, consumer price index (B) - based on the next 30 per cent of households, spending $16,000 to $29,999 a month - rose 4.9 per cent year-on-year in April, down 0.1 percentage point from the previous month's 5 per cent.

The Hang Seng consumer price index - which is based on the 10 per cent of households spending $30,000 to $59,999 a month - increased 4.7 per cent year-on-year in April, 0.1 percentage point down from March's 4.8 per cent.

The Government attributed the declines in the first two indices to slower increases in food prices, the cost of eating out and household rentals.

Meanwhile, Hang Seng Bank - which publishes a third index - said the decline was a result of the lower prices in some food items, including seafood and fresh vegetables, because of abundant supplies.

Analysts said the continuous decline in inflation indicated a slowing economy and could have been a result of the sustained high levels of interest rates the economy had endured.