HONG KONG: Prices in Hong Kong have gone up for the third successive month, newly released government figures revealed yesterday.

The Census and Statistics Department said the Composite Consumer Price Index (CPI) for November, which represents overall consumer prices, rose by 0.5 percent over the same month last year, smaller than the 2.2 percent rise in October. Taking the first eleven months of this year together, prices have risen by 0.5 percent.

A government spokesman says that inflation remained stable at a slightly negative level in November. He added the deflationary pressure in the economy has progressively receded, now that the economic recovery is under way.

"Inflationary pressure should stay muted in the near term, as the economic recovery is still at its early stage and as import prices remain soft," the government spokesman said.

The Hong Kong Monetary Authority said in its quarterly report released last week that inflationary pressure remained largely subdued following successive quarters of moderation. The HKMA believed the underlying price pressure is expected to be contained in the coming months given the moderate local costs pressure and the modest import price inflation.

The government said the larger change in October 2009 was due to the low base of comparison because of the government's payment of public housing rentals in October 2008, which did not affect November figures.

Netting out the effects of all the government's one-off relief measures, the rate of change in November prices was -0.3 percent,the same as that in October.

Economists surveyed by Bloomberg survey predicted a 0.8 percent increase for November inflation.

"Through the first half of next year, inflation should be mild," said Kelvin Lau, an economist at Standard Chartered Bank. "It may start to pick up in the second half due to rising rentals."

Among the various CPI components, increases in prices were recorded in November for electricity, gas and water (31.7 percent in the Composite CPI); alcoholic drinks and tobacco (21.8 percent); clothing and footwear (2.8 percent); and meals bought away from home (0.5 percent).

Declines in prices were recorded in November durable goods (-3.5 percent in the Composite CPI), and food (-2.2 percent, excluding meals bought away from home). Housing costs remained at the same level as November last year, but transportation prices fell by 1.0 percent.

(HK Edition 12/22/2009 page4)