Hong Kong Inflation August 2016

Hong Kong

Inflation jumps in August

Inflation came in at 4.3% in August, which was notably above July’s 2.3%. The reading came on the back of a strong base effect on housing rents following the scrapping of public rent supports last year, which had been in place since 2008. Higher prices for food and electricity, gas and water were also behind August’s figure. Conversely, prices for durable goods as well as clothing and footwear continued their downward trend. A government spokesman suggested that, looking ahead, “inflation pressure should remain contained in the near term, given the soft import prices and moderate increases in local costs. The Government will continue to monitor the inflation developments closely, particularly its impact on the lower-income people.”

For the three-month period from June to August, the average of the month-on-month variations in consumer prices came in at 0.1% in seasonally-adjusted terms, which was above the flat reading recorded in the three months up to July. Meanwhile, annual average inflation came in at 2.6% in August for the sixth month in a row, marking the lowest reading since February 2011.

FocusEconomics Consensus Forecast panelists expect inflation to average 2.3% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, the panel expects inflation of 1.9%.

Author:, Economist

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