5.
(b)
Consumer prices
It is, of course, changes in consumer prices which
attract the most attention because of their direct impact on
the standard of living. In the first nine months of this year
the Consumer Price Index (A) was 5.3% higher than in the same
period last year (1). This index is heavily weighted towards
foodstuffs (57%), and fresh foodstuffs at that (23%), and a
very large proportion of our foodstuffs is imported. prices of foodstuffs in Hong Kong are, therefore, sensitive to
factors beyond our control. Yet, in the first nine months of
this year, the component of the C.P.I. representing the price
of foodstuffs was only 5.9% higher than in the same period
last year.
6.
Retail
For 1978 as a whole compared with 1977 as a whole,
I recently forecast that the increase in the C.P.I. would be
about 6% and I stick by that forecast, which is, incidentally,
only slightly above the increase of 5.8% in 1977 over 1976.
These increases may be compared with the historic high of 18.2%
in 1973 over 1972 and the average annual increase over the four year period 1972 to 1976 of 9.5%.
7.
(c) Prices of investment goods
As for the prices of investment goods, as indicated by the deflator used to calculate the investment component of the GDP in real terms, my forecast is for an increase in 1978
over 1977 of 8% which represents an acceleration on the 6.8% increase in 1977 over 1976. But this is still below the average
annual increase over the four year period 1972 to 1976 of 8.5%.
This overall measure of increases in the prices of investment
goods conceals, of course, differences between increases in the
prices charged by the building and construction industry, on the
(1)
Corresponding changes in the C.P.I. (B) and the Hang Seng Consumer Price Index were 5.4% and 5.0% respectively.
3
/one