ENG-2020 — Page 84

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The Economy

As to demand-supply balance, the vacancy rate of retail shop space went up from 10.1 per cent at end-2019 to 11.4 per cent at end-2020, and those of office space and flatted factory space from 9 per cent and 5.9 per cent respectively to 11.5 per cent and 6.4 per cent respectively. The vacancy rates of the respective long-term averages for these three types of non-residential property over 2000-2019 were 8.8 per cent, 9.1 per cent and 7.1 per cent.

Price Movements

Consumer price inflation receded visibly in 2020, as price pressures on most goods and services eased amid austere global and local economic conditions. The moderated year-on-year increase in prices of basic foodstuffs in the second half of the year against a high base of comparison also contributed. Netting out the effects of the government's one-off relief measures, underlying consumer price inflation eased from 3.0 per cent in 2019 to 1.3 per cent in 2020. Headline consumer price inflation likewise went down from 2.9 per cent in 2019 to 0.3 per cent in 2020, helped by the implementation of additional one-off relief measures by the government. Quarterly figures, though sometimes distorted by temporary factors, showed that underlying inflation eased from 2.9 per cent in the first quarter to 1.8 per cent in the second quarter, and further to 0.3 per cent and 0.2 per cent in the third and fourth quarter respectively (chart 13).

Chart 13

Per cent

6

5

4

3

2

1

0

-2

Main Inflation Indicators

(year-on-year rate of change)

GDP deflator

Underlying Composite CPI

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2016

2020

I

I

2017

2018

2019

Underlying consumer price inflation receded visibly in 2020.

Domestically, among the underlying consumer price index components, private housing rentals stayed on a decelerating trend through 2020 and showed mild declines in the latter part of the year. Food inflation also eased, as the increase in prices of basic foodstuffs moderated in the second half of the year against a high base of comparison, while prices of meals bought away from home saw a narrowed increase amid the local epidemic. As to business costs, wage

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