Hong Kong Census & Statistics Department announced Tuesday that overall consumer prices rose 1.6 percent in July over the same month last year, lower than the corresponding increase of 3.7 percent in June.

The department said netting out the effects of all Government's one-off relief measures, the year-on-year rate of increase in the Composite Consumer Price Index (CPI), or underlying inflation rate, in July was 4.2 percent, also lower than 4.5 percent in June, mainly because of smaller increases in private housing rentals and the decreases in the prices of pork.

The department said increases in both food prices and private housing rentals moderated further in July. The more notable decline in the year-on-year rate of headline inflation was also owing to Hong Kong Government's payment of public housing rentals, which did not take place in the same month last year.

Inflation is likely to recede further in the coming months, given the more difficult economic environment as well as the deceleration of import prices.

On a seasonally adjusted basis, the average monthly rate of change in the Composite CPI from May to July was -0.7 percent, and that from April to June was 0.2 percent.

Netting out the effects of all Government's one-off relief measures, the average monthly rate of change in the Composite CPI from May to July was 0.1 percent, and that from April to June was 0.2 percent.

For the first seven months as a whole, the Composite CPI rose 4. 3 percent over last year. Netting out the effects of all Government's one-off relief measures, the Composite CPI rose 5.3 percent year-on-year.