Hong Kong CPI shrinks to 1.7% in March 2023

Food prices declined against a high benchmark caused by supply disruptions easing the city's inflation rate.

Hong Kong's Consumer Price Index (CPI) decreased to 1.7% in March 2023 from the average of 2.1% in January and February of the same year. The city's underlying inflation rate, netting out the effects of the local government's one-off relief measures, also hit the 1.7% mark, virtually the same as that in February.

Data from the city's Census and Statistics Department also stated electricity, gas, and water (19.9%) had a sizeable year-over-year increase in prices amongst Composite CPI's components, followed by alcoholic drinks and tobacco (18.7%), clothing and footwear (6.3%), meals out and takeaway food (4.5%), transport (2.8%), miscellaneous services (2.7%), and miscellaneous goods (1.0%).

On the other hand, essential foods and durable goods had a 2.8% year-over-year decrease, respectively, followed by housing (0.2%).

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A government spokesman said that food prices declined against a high base of comparison that the epidemic-induced supply disruptions caused last year eased the underlying inflation rate.

"Looking ahead, domestic cost pressures may increase alongside the improved economic situation, while external price pressures would remain notable for some time. Overall inflationary pressure may increase gradually but should remain moderate sooner or later," the spokesperson said, adding they will continue to monitor the situation.