Deflation Worsens In September As Covid Eases

Deflation in Hong Kong has taken a turn for the worse, with overall consumer prices suffering a larger year-on-year drop in September from the previous month due mainly to the waiver of public housing rentals.

Data released by the government on Thursday showed the Consumer Price Index (CPI) dropping 2.2 percent in September from a year ago, compared with a drop of 0.4 percent in August.

Netting out the effects of one-off relief measures, the composite CPI rose 0.5 percent year-on-year in September, up from 0.1 percent in August, because of an increase in the price of restaurant dining thanks to an easing Covid-19 pandemic and a rise in public housing rentals.

On the other hand, the prices of electricity, gas and water went down by nearly 20 percent, while prices of clothing and footwear, housing, durable goods and transport were lower by less than 10 percent.

Looking forward, the government said it expects inflationary pressures to remain mild for the rest of the year under the threat of Covid-19.