Service industry consumer prices suffer biggest-ever fall

PUBLISHED : Friday, 29 October, 1999, 12:00am
UPDATED : Friday, 29 October, 1999, 12:00am

Consumer prices in service industries fell 6.5 per cent last month compared with a year earlier, their biggest slip on record, as the effects of deflation lingered through the economy.

This was a bigger decline than the fall in the consumer price index (CPI), which dropped 6 per cent from the same period a year earlier.

Last month's drop in the CPI represented a moderate slowdown in the rate of price declines following a record 6.1 per cent year-on-year fall in August, the composite CPI's biggest ever drop for a single month.

The composite consumer services price index fell at the same rate in August.

Last month was also the first time in at least five years that service prices had fallen at a bigger rate than goods.

The Hong Kong Coalition of Service Industries, which produces the index, attributed the fall to the impact of downward rental contract reversions and an easing of entertainment and holiday services after the summer period.

Some economists have warned that while Hong Kong's economy appeared to be recovering - with signs of improvements to consumer and investor confidence - it will remain in deflationary mode until at least next year.

prices suffer biggest-ever fall