Below quoted from several websites ( apologies for the plagiarism):
Readers may have noticed that the headline inflation rate, as measured by, for example, the Composite Consumer Price Index (CCPI), has remained subdued, contrary to their impression of the actual situation as consumers or observers of economic developments in Hong Kong.
But on this occasion, there is a good explanation for the observed gap between the headline inflation rate and the impression of consumers. The gap is the result of the special government tax-relief measures, particularly the rebate of property rates. In September 2007 while the headline inflation rate, measured by the year-on-year rate of increase in the CCPI, was 1.6%, the underlying inflation rate, after adjusting for the special effect, reached 2.7%. Furthermore, the seasonally adjusted annualised rate of increase over the three months to September 2007 reached 3.4%. Consumer prices have indeed been increasing faster than the rate suggested by the headline numbers.
Rapid labour productivity growth is likely to mitigate some of the inflationary pressures. Labour productivity, measured in output per worker, has been increasing by 5.3% year on year on average since the third quarter of 2003, much faster than the 1.4% growth in labour payroll,
Higher food prices drove Hong Kong's underlying inflation rate up to 4.3 percent year on-year in January 2008, official figures showed Friday.