Inflation up 0.3% in February

The government has noted consumer prices are volatile around the Lunar New Year celebration.

The overall consumer prices rose by 0.3% in February over the same month in 2020, smaller than the corresponding 1.9% increase in January this year, the Census and Statistics Department (C&SD) said.

The larger increase in January was attributed to the low base of comparison in January 2020, driven by the government’s payment of public housing rentals and waiver of two-thirds of rent for tenants.

As for the consumer prices in February, the C&SD said it is expected to show volatility in light of the timing of the Lunar New Year.

“As the Lunar New Year fell in mid-February this year but in late January last year, the year-on-year comparison of the figures for January and February 2021 might have been affected by this factor to a certain extent,” the report read.

Taking the first two months, the composite CPI rose 1.1% over a year earlier; and netting out the effect of one-off relief measures leads to a -0.3% rate of change.

On a seasonally adjusted basis, the average monthly rate of change in the three-month period leading to February is 0% and 0.2% in the three-months to January. The corresponding rates of change, upon netting out one-off relief measures, are -0.1% and 0.1%.

“Taking the first two months of 2021 together to neutralise the distortions caused by the timing of the Lunar New Year, underlying consumer prices registered a small year-on-year decline of 0.3%, mainly reflecting the narrowed increase in food prices and the enlarged fall in private housing rentals,” a government spokesperson said. “Meanwhile, price pressures on other major CPI components remained very mild.”

The spokesperson added price pressures are expected to stay mild in the near term.

Further, among the components of the composite CPI, electricity, gas and water recorded the highest increase in prices of 19.3% in February. Food price, excluding meals bought away from home rose 1.5%, whilst miscellaneous services and meals bought away from home rose 1.2% and 0.2%, respectively.

A year-on-year price decrease of 3.9% was recorded in clothing and footwear, 2.9% in transport, 1.7% in durable goods, 0.9% in alcoholic drinks and tobacco, 0.2% in housing, and 0.1% in miscellaneous goods.