The Effects of Rising Food Price in Hong Kong

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  • Topic: Inflation, Consumer price index, Austrian School
  • Pages : 3 (930 words )
  • Download(s) : 238
  • Published : April 24, 2011
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The effects of food price inflation in Hong Kong
Over the past few years, the prices of food have been increasing in Hong Kong. The Hong Kong Census and Statistics Department (2010) reported that the increase in food price in 2009 was relatively large. Some of the food items that experienced surges in prices included live chicken (20% increase in average retail price) and fresh beef (7% increase in average retail price). Outcries by the public have suggested that this food price inflation has had a negative impact on Hong Kong’s people. I will be analyzing the impacts of this food price inflation on the people of Hong Kong. The value of money has been deteriorating; an amount that was once deemed enough to run a household for a month may only be sufficient for a week today. This is because the prices of food, a necessity in all households, are increasing. Wong (2010) noted that Tse, a housewife, complained about having to spend $40 more per meal on average to feed her family of four. This is just one complaint of many others seen on newspapers every day. Wong also pointed out that the sugar prices rose by 80% and this might lead to people, particularly those of the low income family for whom this increase could be a large portion of their income, to minimize their intake of food containing such expensive ingredients like the sweet sticky rice cake traditional eaten in Chinese New Year. This shows that the food price inflation causes the purchasing power of citizens of Hong Kong to decrease, directly affecting their expenditure and, perhaps eating habits. Resources are scarce; when one spends more on a product he/she spends less on another. The lower the income of a person, the higher the impact of inflation as a small increase in price of food could be a relatively large portion of his/her income. This leads to a smaller portion of income being left for spending on other goods and services. In 2009, Hong Kong Census and Statistics department (2010) recorded...
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