There will be mixed signals about the city's consumer price index in October, when all government relief measures and subsidies come to an end, according to a senior government official.
For the first time, one index of CPI will show inflation, while another will indicate some slight deflation.
Commissioner for Census and Statistics Fung Hing-wang said the headline change to CPI - which measures price levels including the impact of all government subsidies, such as the electricity tariff payout - will see inflation in October after most of the one-off relief measures expire next month.
But the underlying change in CPI - with the effects of such relief measures on the economy discounted - will reflect a slight decline in prices.
The government has doled out four rounds of sweeteners worth HK$87.6 billion since February last year, and Chief Executive Donald Tsang Yam-kuen said last week that no more handouts would be announced in October's policy address.
Mr Fung said the government's waiver for public housing rent was the biggest component contributing to the reduction of the year-on-year change in headline CPI, as a third of people lived in subsided flats. The two-month waiver will come to an end next month.
The latest headline CPI saw a drop of 1.5 per cent in July compared with a year earlier, while the underlying index posted minus 0.3 per cent.
