HK's deflation rate slowing
Updated at 6.40pm: Hong Kong is continuing to experience deflation - although it is easing - with prices falling 0.1 per cent in June, year-on-year, latest statistics released on Friday showed.
The 0.1 per cent fall was considerably smaller than the 0.9 per cent decrease in May, the figures showed.
The Census and Statistic Department said the smaller decline in the consumer price index (CPI) figures was 'partly attributable to the lower base of comparison brought about by an electricity company in June 2003'.
'Other contributory factors included a moderate decline in private housing rentals, as well as enlarged increased in the charges of packaged tours and for inbound and outbound transport,' the department said in a statement.
The deflation rate was even milder than private economists had estimated. Dow Jones Newswires surveyed 11 economists whose predictions averaged deflation of 0.3 per cent.
'It's over,' said a general manager at the Hong Kong brokerage Fulbright Securities, Francis Lun, who believes the territory could return to inflation by year's end. 'In fact, the prices of electricity, food and oil are already surging.'
June's price drops meant that Hong Kong has now endured 68 consecutive months of deflation. In July last year, the deflation rate hit a high of four per cent.
