Consumer prices fell 1.9% in December compared with the same month in 2002, narrowing further on November's 2.4% drop.

The smaller year-on-year decline in the Consumer Price Index in December was mainly attributable to dissipation of the effect of the waiver of water and sewage charges implemented in the August-November quarter.

Also partly contributing were moderated decreases in the charges for meals bought away from home and in the prices of basic foodstuffs, as well as enlarged increases in the price of jewellery amidst higher gold prices, and in the price of outer clothing.

Noting the year-on-year decline in overall consumer prices narrowed further in December, the Government said other contributing factors were moderated decreases or slight increases in the retail prices of some goods and services amidst the revival in local consumer spending and surge in inbound tourism, as well as amidst higher import prices owing to a weaker US dollar.

Analysed by sub-index and on a year-on-year comparison, the CPI(A), CPI(B) and CPI(C) fell by 1.2%, 2.1% and 2.5% respectively in December, all narrowing further from the corresponding falls of 1.8%, 2.5% and 2.8% in November.

Amongst the various CPI components, housing continued to register the largest year-on-year decline in prices in December (-5.5% in the Composite CPI and -3.0% in the CPI(A)).

This was followed by durable goods (-5.0% in the Composite CPI and -4.6% in the CPI(A)), miscellaneous services (-3.8% in the Composite CPI and -4.7% in the CPI(A)), food (excluding meals bought away from home) (-0.9% in the Composite CPI and -0.8% in the CPI(A)), meals bought away from home (-0.7% in the Composite CPI and -0.4% in the CPI(A)), and transport (-0.3% in the Composite CPI and -1.2% in the CPI(A)).

On the other hand, year-on-year increases in prices were recorded in December for electricity, gas and water (9.8% in the Composite CPI and 11.0% in the CPI(A)), miscellaneous goods (4.6% in the Composite CPI and 2.6% in the CPI(A)), clothing and footwear (3.7% in the Composite CPI and 1.7% in the CPI(A)), and alcoholic drinks and tobacco (0.3% in both the Composite CPI and CPI(A)).

For 2003 as a whole, the Composite CPI was on average 2.6% lower than in the preceding 12-month period. The respective decreases in the CPI(A), CPI(B) and CPI(C) were 2.1%, 2.7% and 2.9%.