Hong Kong's consumer price indices (CPIs) have been rebased, with the weighting given to housing rising the most at 2.49 percentage points. This reflects the significant increase in rents for private housing over the past five years, the city's statistics agency announced Thursday.

The rebased CPIs are based on the results of the latest household expenditure survey (HES) conducted by the Census and Statistics Department (C&SD) from October 2009 to September 2010.

HES is conducted every five years to provide up-to-date information for rebasing the CPIs, according to Lily Ou-yang, the acting commissioner for the C&SD.

Around 6,000 households participated in the latest survey, representing a response rate of 77 percent.

Compared with the existing CPIs, housing, among all items in the CPI basket, showed the biggest change in the expenditure weight of the rebased CPIs, rising by 1.7-3.7 percentage points across the three separate CPI series, namely CPI (A), CPI (B) and CPI (C).

These are compiled based on the consumption patterns of households in relatively low, medium, and relatively high expenditure ranges respectively. The Composite CPI is compiled based on the aggregate expenditure pattern of all the households covered by CPI (A), CPI (B) and CPI (C) taken together for reflecting the impact of consumer price changes on the overall household sector.

The main reason behind the changes, noted Ou-yang, is "the general rise in rents for private housing over the past five years". Such a rise, she added, which has come somewhere between 20 percent and 25 percent, is "among the steepest increases" in rents since HES was first conducted in 1947.

The latest HES showed that families that live in private housing spent an average of HK$10,647 per month on housing during the 2009-10 period. And as the economy continues to grow, spending on housing is likely to continue to increase, Ou-yang said.

After the rebasing, housing accounts for 31.66 percent of the composite CPI, a gain of 2.49 percentage points compared with the existing one.

The weight of food also increased, by 0.5 to 1.6 percentage points across the different CPIs, which, according to Ou-yang, reflects the higher prices of basic food items as well as the increasing costs of meals bought away from home.

Except housing and food, all other items in the CPI basket, including transport and clothing, recorded decreases in their respective weightings.

According to the latest HES, household consumption expenditure increased by 14.5 percent over the past five years as consumer prices trended up. Taking away the inflationary effect, household expenditure rose by 2.9 percent during the five-year period.

china daily

(HK Edition 04/29/2011 page3)