Hong Kong consumer prices rise 6.1%

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The headline inflation rate of 6.1% in June was the same as the underlying rate because the effect of the rates concession was offset by a similar relief measure in June last year.

The pick-up in inflationary pressure was mainly due to the sustained surge in food and energy costs as well as the strength of the local economy which exerted greater upward pressures on housing rents and, to a lesser extent, on prices of various goods and services.

Uncertain outlook

The department said the inflation outlook for the rest of the year remains uncertain, due to the volatile international food and energy prices.

The pace of economic expansion in the period ahead will also affect the extent of the domestically generated inflationary pressure. Nevertheless, the relief measures the Chief Executive announced last week and in the 2008-09 Budget will help to lower the headline inflation, notably in the latter part of the year.

June saw year-on-year increases in the price of food (excluding meals bought away from home) rise 18.9%. Foods with large price hikes were rice (64%), beef (50.8%), pork (48.2%), canned meat (39.2%), edible oils (32.2%), freshwater fish (27.7%) and other meat (26.8%).

Year-on-year increases were also recorded in electricity, gas and water (7.4%), meals bought away from home (6.4%), housing (6.3%), miscellaneous goods (5.6%), transport (3.3%), miscellaneous services (1.8%), clothing and footwear (1.4%), and alcoholic drinks and tobacco (1.1%). A year-on-year fall was recorded for durable goods (1.9%).