Costlier food hits low-income families harder

Low-income households were hit hardest by rising prices in the second half of last year due largely to costlier food, according to Statistics Department data yesterday.

Consumer prices for households in the bottom fifth went up 1 per cent in the second half of 2014, compared with the same period a year earlier.

This was higher than the 0.6 per cent rise for the middle 60 per cent.

Inflation was unchanged for those in the highest 20 per cent income group.

More expensive food, higher school and tuition fees, as well as higher medical treatment fees contributed to inflation for all three income groups.

The lower rates of inflation experienced by the middle 60 per cent and highest 20 per cent income groups were largely due to moderating car prices, which had a bigger impact on their consumption baskets because they spend a larger percentage of their income on cars.

The increase in food prices had a larger impact on households in the lowest income bracket due to their larger expenditure share on food items.

This article was first published on Jan 24, 2015.
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