Chapter 5
Consumer Prices
(In this chapter, retail prices of foodstuffs are related to import prices and to domestic consumption; import statistics for the fourth quarter of 1973 were not available at the time this publication went to print and consequently the discussion is not generally taken further than September 1973)
The General Consumer Price Index and Seasonality
76. Consumer prices, as reflected in the General Consumer Price Index, increased at an unprecedented rate in 1973. The prices and supplies of certain items (almost exclusively fresh food items) represented in the index are subject to seasonal variations; and, as in the case of, for example, fresh vegetables these can be quite marked (as is indicated in Diagram 4). These items have a weighting of as much as 32.7% in the index and, as a result it, too, exhibits seasonal fluctuations which may also be relatively large.
Diagram 4 Retail Price and Domestic Consumption of Fresh Vegetables, 1970-1973
Domestic Consumption '000 piculs 500
450
400
350
(three-month moving averages)
M
300
Retail Price HK$/picul
260
240
220
200
77. Because of these seasonal fluctuations in the General Consumer Price Index, a direct comparison of the index for any one month with that for any other can give a very misleading impression of the way in which prices tended to move over the period concerned. For this reason it is advisable to adjust the General Consumer Price Index for seasonality. In prin- ciple, a direct comparison of one seasonally adjusted index with another provides, for the period involved, a reasonable idea of move- ments in consumer prices from which the distorting influence of normal seasonal factors has, at least in a statistical sense, been removed.
78. The General Consumer Price Index, on a seasonally adjusted basis, is shown in Table 25 for the years 1971 to 1973, and from this it can be seen that consumer prices tended to remain fairly stable in 1971 and for most of 1972, but that they increased rapidly towards the end of 1972 and for much of 1973. In the nine months to September 1973, the index increased, on a seasonally adjusted basis, by 20% compared with 4% for the corresponding period of 1972.
General Consumer Price Index, 1971-1973
Table 25
(Sep 1963-Aug 1964-100)
24
(Seasonally adjusted)
1971
1972
1973
160
140
180
8 8 8 9 2 8 8
80
120
100
ил
Jan
131
136
144
Feb
127
135
151
Mar
129
133
154
Apr
128
135
157
May
129
141
160
Jun
131
140
162
Jul
131
138
169
Aug
132
138
170
Sep
131
140
175
Oct
132
140
177
Nov
Sep
Sep
Sep
132
Sep
146
172
1970
1971
1972
1973
Dec
134
146
174
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