Prices up but inflation slows

PUBLISHED : Saturday, 22 January, 1994, 12:00am
UPDATED : Saturday, 22 January, 1994, 12:00am

PRICES rose slightly faster in the last month of 1993, but the average inflation rate for the year still showed an improvement despite the soaring costs of housing, transport and other services.

The average rise last month in the Consumer Price Index (A) - the widest measure of inflation - was 8.6 per cent over the year, compared to 9.4 per cent in 1992 and 12.1 per cent in 1991.

Hong Kong's wealthier households felt the full brunt of rising prices last year, according to the latest official figures released yesterday.

While inflation among the lower spending households, as measured by the Consumer Price Index (A) and (B) was almost bang on the Government's target of 8.5 per cent, the Hang Seng CPI, which measures spending among the better-off, saw a 10.2 per cent riseover the 12 months.

While the figures released yesterday are in line with most forecasts, opinions among economists about the current year's prospects for prices varies widely.

Some fear the huge inflows of capital into the territory in the second half, which sent the share prices shooting up, will be reflected in rapidly rising prices of capital items.

Others, however, say that the easing of wages as manufacturing industry continues to move over the borders, is affecting spending and keeping prices in check.

In December, prices rose slightly, according to government figures. The CPI (A) - which measures household expenditures of between $2,500 to $9,999 - rose to 8.6 per cent compared to 8.4 per cent in November.

The CPI (B) measure - for households which spend between $10,00 and $17,499 - moved up slightly less quickly, rising from 8.4 per cent in November to 8.5 per cent last month.

The Government said yesterday that the last month's rises were mainly due to more rapid increase in the prices of food, particularly fresh fruit and salt-water fish.

The better-off households - where spending is between $17,500 and $37,499 - also reflected rising prices of fish as well as fresh vegetables and fruits which were in relatively short supply.