Inflation to go up in 2H10: Francis Tam

The Secretary for Economy and Finance, Francis Tam Pak Yuen, said yesterday that the inflation rate is likely to go up in the second half of this year. According to Mr Tam, the appreciation of the RMB and the supply of daily necessities from the Chinese mainland to Macau are the two major factors that will affect local inflation. However, he added that the government will closely follow local economic development and will adopt specific measures in a “timely” manner to ease the inflation pressure on local residents (especially disadvantaged groups), namely once the inflation rate reaches three percent. Mr Tam explained that the local authorities would base their decisions not on the Composite Consumer Price Index (CPI) monthly figures as the major indicator for inflation changes, but on average figures for a whole period of 12 months. The Composite CPI for June 2010 increased by 2.68 percent year-on-year. The average Composite CPI for the first half year of 2010 increased by 2.09 percent year-on-year. For the 12 months ended June 2010, the average Composite CPI rose by 0.97 percent from the preceding period.