Mr Koo mentioned that 'the official inflation rate... is about 4.2 per cent, which is way below actual price increases consumers are experiencing'.

We wish to clarify that the inflation rate measured by the Consumer Price Index (CPI) is an average of how much the prices of a basket of goods and services bought by households have changed over time.

It is compiled based on international standards and detailed analysis of the consumption patterns of some 5,400 households covered in the Household Expenditure Survey.

The change in the overall CPI thus represents average price movements across selected commodity items and outlets.

While prices of some items have increased by 10 per cent or more at certain outlets, there were also those which had much smaller price increases or none at all.

For example, average prices of milk (including milk powder) and bread were 13 per cent and 15 per cent higher in November 2007 compared to November 2006, but prices of pork and non-food items like clothing went up by just 3 per cent and 1.2 per cent respectively during the same period.

Taking into consideration the price movements of all items, the overall CPI increased by 4.2 per cent on average in November 2007 compared to a year before.

Foo-Wu Wen Chee (Mrs)
Deputy Director (Consumer Price Index)
Department of Statistics