Food fuels May CPI to 5.7%
Updated: 2008-06-21 07:25
By Karen Cho(HK Edition)
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If you're searching for an excuse to eat out this weekend, look no further than the new figures released along with the consumer price index (CPI) on Friday.
At just a tenth of a percent higher than analysts' expectations, the May CPI reached 5.7 percent.
And food prices didn't help, continuing their steep incline with an 11.2 percent increase over the same time last year.
And contrary to common belief that dining out is more expensive than a home-cooked meal, groceries jumped 19.2 percent last month, while eating out cost consumers just 6.4 percent more.
Prices in staple meats were the major culprits fueling inflation.
Pork and beef recorded a 57 and 50 percent jump, respectively, last month, while canned meats went up 46 percent. The price of rice also swelled by 40 percent.
But to the relief of consumers, economists say those climbing food prices are going to level out in the remaining months of the year.
"In April, food inflation was at 11.1 percent, while (in May) the figure stood at 11.2 percent," Standard Chartered Bank economist Kelvin Lau said.
He expects the territory's food inflation to ease, but he said that those who rent property won't be so lucky.
Rent grew by 6 percent in May over the same time last year, and it hit 8 percent for those living in private estates.
And Lau said that with the Hong Kong property market showing no signs of a slowdown, rent is likely to continue growing this year.
Looking ahead, the economist expects inflation in the territory to hover around 5.2 percent. "This is still an acceptable level, but what we need to pay attention to is whether inflationary pressure will bring about secondary impacts on the CPI," Lau said.
He explained that workers will likely demand higher salaries during high-inflation periods, and that could cause durable goods such as electronics and cars to be costlier.
Last month, the cost of durable goods actually dipped by 1.9 percent below the same time last year.
The government called the inflation outlook uncertain, but noted that the volatility in global food prices means inflationary pressure is rising.
Still, the negative impact could be cushioned by the growing labor productivity, the government said.
And according to the latest figures released by the government yesterday, employment in the private sector saw a 2.5 percent increase in March 2008 over the same period last year.
(HK Edition 06/21/2008 page2)