Consumer prices were down 3.2% in September compared a year earlier, and the figure was distinctly smaller than the 3.8% fall the month before.

The narrowed year-on-year decline in the Composite Consumer Price Index in September was mainly attributable to renewed increases in the price of fresh vegetables and women's clothes, and in package tour charges.

Also contributing was the moderated decline in charges for telephone and other communications services, the Census & Statistics Department said.

The Government notes that by September, overall consumer prices had declined for almost five years. Yet the fall has narrowed over the last couple of months, with a progressive pick-up in overall economic activity.

This reversed the widening decrease seen earlier in the year, mainly upon the impact of SARS.

The decrease will narrow further in the near term, when the dampening effect on the CPI brought about by the rates concession and the waiver of water and sewage charges will dissipate by October and December respectively.

Amongst the various CPI components, housing continued to register the largest year-on-year decline in prices in September (-8.1% in the Composite CPI and -6.8% in the CPI(A)).

This was followed by durable goods (-6.1% in the Composite CPI and -5.8% in the CPI(A)), miscellaneous services (-2.8% in the Composite CPI and -3.0% in the CPI(A)), meals bought away from home (-1.5% in the Composite CPI and -1.1% in the CPI(A)), food (excluding meals bought away from home) (-0.9% in the Composite CPI and -0.6% in the CPI(A)), clothing and footwear (-0.6% in the Composite CPI and -0.8% in the CPI(A)), and transport (-0.1% in the Composite CPI and -0.6% in the CPI(A)).

However, year-on-year price increases were recorded in September for miscellaneous goods (2.8% in the Composite CPI and 1.3% in the CPI(A)), and electricity, gas and water (1.0% in both the Composite CPI and CPI(A)).

Alcohol and tobacco prices rose by 0.1% in the Composite CPI but remained unchanged in the CPI(A).