3.7% Inflation Marked In July

Overall consumer prices rose 3.7% in July year-on-year, larger than the 0.7% growth in June, the Census & Statistics Department announced today.

Netting out the effects of the Government’s one-off relief measures, July’s underlying inflation rate went up 1% on a year earlier, higher than the 0.4% recorded in June.

The Government said the climb in consumer prices in July was a result of the low base of comparison arising from the Government’s payment of public housing rentals and the Housing Society’s waiver of two-thirds of rent for tenants of Group B estates in July 2020.

Meanwhile, the rising underlying inflation rate was mainly due to the increased costs for meals out and takeaway food as well as local transport fares.

Compared with July last year, price increases were seen in electricity, gas and water, transport, housing, meals out and takeaway food, clothing and footwear, basic food, durable goods and miscellaneous services. On the other hand, year-on-year decreases in miscellaneous goods as well as alcoholic drinks and tobacco were recorded.

The Government commented that the underlying consumer price inflation rate’s 1% surge in July mainly reflected a low base of comparison a year earlier caused by the third wave of the local COVID-19 epidemic and the extra MTR fare discount. Pressures on major consumer price index components remained modest.

Looking ahead, while the continued economic recovery and rising import prices may entail some upward pressures on prices, the underlying inflation should remain largely contained in the near term as the local economy is still operating below capacity, it added.