Hong Kong's consumer prices increased 1.4% year over year in March, slower than the 1.7% average in January and February, according to data from the city's census and statistics department released Wednesday.

Net of the effects of relief measures, composite CPI or underlying inflation slowed to 1% in March from 1.3% in January and February.

The comparison with the average for January and February is to account for the effects of the Lunar New Year festivities, which do not happen on a fixed date but usually take place between the two months.

Prices of utilities surged 14% while that of alcoholic drinks and tobacco jumped 4.4% during the month, the department said.

Transport and housing inched up 1.7% each during the month.

Inflation is seen to stay modest in the near term, a government spokesman said.

Apparel prices slid 2.8% in March, while that of basic food and durable items inched down 1.5% and 0.5%, respectively.