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Hong Kong - Inflation

chart-Hong_Kong-Inflation

Inflation slows to nine-month low in February

Annual inflation came in at 3.9% in February, which was well below the 4.6% recorded in January. The print slightly overshot the 3.8% market analysts had expected and represented the lowest rate in nine months. According to the Census and Statistics Department, the result was mainly driven by higher prices for electricity, gas and water, and for housing. Annual average inflation inched down from 4.5% in January to 4.4% in February.

In February, consumer prices rose 0.3% over the previous month in seasonally-adjusted terms, which was down from the 0.4% increase tallied in January.

The weaker rate observed in February was mostly attributable to seasonal effects stemming from the Lunar New Year holiday, which fell in late January to early February this year versus 2013 when it occurred in mid-February. A government spokesman stated that, “inflation pressure remained largely contained.” In addition, the spokesman affirmed that, “Looking ahead, the generally mild imported inflation and the feed-through of the milder increases in fresh-letting residential rentals in 2013 should help contain the upside risks to inflation in the near term.”

The government expects inflation to reach 4.6% in 2014. FocusEconomics Consensus Forecast panelists expect inflation to average 3.8% in 2014, which is up 0.1 percentage points from last month’s forecast. For 2015, the panel expects annual average inflation to moderate to 3.5%.

chart-Hong_Kong-Inflation

Note: Annual variation of consumer price index (CPI) in %.
Source: Census and Statistics Department Hong Kong and FocusEconomics calculations.


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Hong Kong: Inflation edges up in January

February 21, 2014

Annual inflation came in at 4.6% in January, which was above the 4.3% recorded in December. The print exceeded the 4.4% market analysts had expected and marked the highest rate in four months. According to the Census and Statistics Department, the result was mainly driven by higher prices for electricity, gas and water, as well as for housing. Annual average inflation increased from 4.3% in December to 4.5% in January.

A government spokesman stated that annual inflation increased in January, “due mainly to the difference in timing of the Lunar New Year,” and thus, “it would be more meaningful to examine the figures for January and February combined.” The official also commented that, “ahead, the still-low imported inflation and the feed-through of the milder increases in fresh-letting residential rentals in 2013 should help contain the upside risks to inflation in the near term.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.7% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects annual average inflation to moderate to 3.5%.



Hong Kong: Inflation stable in December

January 21, 2014

Annual inflation was 4.3% in December, which matched the result recorded in November. The print was in line with market expectations. According to the Census and Statistics Department, the result was mainly driven by higher prices for electricity, gas and water, as well as for housing. In the full year 2013, inflation inched up from 4.2% in 2012 to 4.3%.

A government spokesman stated that, “looking ahead, the still-low imported inflation and the feed-through of the milder increases in fresh-letting residential rentals in 2013 should help contain the upside risks to inflation in the near term.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.8% in 2014, which is up 0.1 percentage points from last month’s forecast. For 2015, the panel expects annual average inflation to moderate to 3.6%.



Hong Kong: Inflation moderates in October

November 21, 2013

Annual inflation stepped down from 4.6% in September to 4.3% in October. The print undershot market expectations of 4.5% and marked the lowest rate in four months. According to the Census and Statistics Department, the result was mainly driven by higher prices for housing, as well as for electricity, gas and water. Annual average inflation stabilized at the previous month’s 4.2%.

A government spokesman stated that, “looking ahead, the subdued imported inflation and the moderated increases in fresh-letting residential rentals since early 2013 should help to contain the upside risks to inflation in the near term.”

The government expects inflation to average 4.3% in 2013. FocusEconomics Consensus Forecast panelists expect inflation to average 4.1% in 2013, which is unchanged from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%, which is also unchanged from last month’s estimate.



Hong Kong: Inflation inches up in September

October 21, 2013

Annual inflation inched up from 4.5% in August to 4.6% in September. The print overshot market expectations of 4.4%. According to the Census and Statistics Department, the print was mainly driven by higher prices for fresh vegetables, as well as for electricity, gas and water. Annual average inflation increased slightly from 4.1% in August to 4.2% in September.

A government spokesman stated that, “subdued imported inflation and the moderated increases in fresh-letting residential rentals since early 2013 should help to contain the upside risks to inflation in the near term.”

The government revised its inflation projection for this year and now expects inflation to average 4.3%. FocusEconomics Consensus Forecast panelists expect inflation to average 4.1% in 2013, which is up 0.1 percentage points from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%, which is unchanged from last month’s estimate.



Hong Kong: Inflation moderates sharply in August

September 23, 2013

Annual inflation slowed sharply to 4.5% in August from 6.9% in July, which had marked the highest level since July 2011. The print slightly overshot market expectations of 4.4%. According to the Census and Statistics Department, the print was mainly driven by higher prices for electricity, gas and water and for housing. Annual average inflation was steady at July’s 4.1%.

A government spokesman stated that inflation, “is still subject to modest upside risks in the coming months,” mainly due to the lagging effects of the rise in private housing rentals during 2012. However, the spokesman added that, in the second half of this year, inflationary pressures should remain contained amid subdued imported inflation and the recent mild increase in housing rentals.

The government revised its inflation projection for this year and now expects inflation to average 4.3%. FocusEconomics Consensus Forecast panelists expect inflation to average 4.0% in 2013, which is unchanged from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%, which is down 0.1 percentage points from last month’s estimate.



Hong Kong: Inflation climbs to highest level in over two years

August 20, 2013

Annual inflation increased sharply to 6.9% in July, up from 4.1% in June. The reading represents the highest level since July 2011 and exceeded market expectations of a 5.0% increase. According to the Census and Statistics Department, the sharp rise was mainly due to the low base of comparison, which resulted from the government’s one-off payment of public housing rentals in July of last year. As a result of the acceleration, annual average inflation rose to 4.1% (June: 3.6% year-on-year).

A government spokesman stated that inflation, “is still subject to modest upside risks in the coming months,” mainly due to the lagging effects of the rise in private housing rentals during 2012. However, the spokesman added that, in the second half of this year, inflationary pressures should remain contained amid subdued imported inflation and the recent mild increase in housing rentals.

The government revised its inflation projection for this year and now expects inflation to average 4.3% (previous estimate: 4.5%). FocusEconomics Consensus Forecast panellists expect inflation to average 4.0% in 2013, which is unchanged from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.7%.



Hong Kong: Inflation quickens in June

July 22, 2013

Annual inflation rose to 4.1% in June, which was slightly above the 3.9% recorded in May. The result was in line with market expectations. According to the Census and Statistics Department, the acceleration reflects higher prices for housing and food, as well as for energy and water. That said, annual average inflation dropped to the lowest level in two years, having inched down from 3.7% in May to 3.6% in June.

A government spokesman stated that inflation is likely to increase in the coming months as a result of the effects of the 2012’s increase in private housing rentals that continue to feed consumer prices. The spokesman added that inflationary pressures should remain at bay in the second half of this year amid subdued imported inflation and the recent mild increase in housing rentals.

The government expects inflation to average 4.5% this year. FocusEconomics Consensus Forecast panellists expect inflation to average 4.0% in 2013, which is up 0.1 percentage points from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.7%.



Hong Kong: Inflation eases in May

June 20, 2013

In May, annual inflation edged down to 3.9%, which was slightly below the 4.0% recorded in April, but matched market expectations. According to the Census and Statistics Department, the deceleration reflects declining prices for durable goods, which offset higher prices for housing as well as for energy and water. Annual average inflation remained stable at April’s 3.6%.

A government spokesman stated that inflation is likely to increase in coming months, due to the lagged effects of the rise in private housing rentals during 2012 continue to feed consumer prices. Nonetheless, the spokesman added that in the second half of this year inflationary pressures should remain at bay, amid imported inflation and the recent mild increase in housing rentals.

FocusEconomics Consensus Forecast panellists expect inflation to average 4.0% in 2013, which is up 0.1 percentage points from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.7%.



Hong Kong: Inflation accelerates in April

May 21, 2013

In April, annual inflation rose to 4.0%, which represents an acceleration over the 3.6% registered in March. In addition, the reading exceeded market expectations that had inflation inching up to 3.7%. According to the Census and Statistics Department, higher prices for food, particularly for vegetables were the main drivers behind the annual increase. Despite the April acceleration, annual average inflation continues to ease, inching down from 3.7% in March to 3.6% in April.

A government spokesman stated that inflation is likely to increase in coming months, due to the lagged effects of the rise in private housing rentals during 2012. However, the spokesman added that in the second half of this year inflationary pressures should remain contained, as “imported inflation stayed tame and the recent softening in housing rentals should help contain the upward pressure”.

FocusEconomics Consensus Forecast panellists expect inflation to average 4.0% in 2013, which is up 0.1 percentage points from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.7%.



Hong Kong: Inflation slows after the Lunar New Year holidays

April 22, 2013

In March, annual inflation moderated to 3.6% from the 4.4% tallied in the previous month, which had marked the highest level seen since April 2012 on the back of seasonal effects stemming from the Lunar New Year holidays. Moreover, the reading undershot market expectations of a 3.7%. According to the statistical institute, the monthly print was mainly influenced by lower inflation for food as well as for clothing and footwear. Building on the subdued monthly print, annual average inflation inched down from 3.8% in February to 3.7% in March.

A government spokesman stated that inflation is likely to remain contained in the near term, mainly due to weak economic performance at home and a more benign increase in import prices. That said, further down the road the statistical institute envisages upside risks to inflation, “including the progressive feed-through of the increases in private housing rentals over the past year or so”.

FocusEconomics Consensus Forecast panellists expect inflation to average 3.9% in 2013, which is unchanged from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%.



Hong Kong: Inflation accelerates on Lunar New Year holidays

March 21, 2013

In February, annual inflation rose to 4.4% from the 3.0% tallied in the previous month. The reading overshot market expectations of a 4.0% rate and marks, in fact, the highest level seen since April 2012. According to the statistical institute, the monthly print was mainly influenced by higher prices for housing as well as for food. That said, prices in February were boosted by a seasonal effect stemming from the Lunar New Year holidays, which fell last year in late January but took place this year in mid-February. Despite the acceleration, annual average inflation remained stable at January’s 3.8%.

A government spokesman stated that inflation is likely to remain contained in the near term, mainly due to weak economic performance at home and a more benign increase in import prices. That said, further down the road the statistical institute envisages upside risks to inflation “stemming from the potential volatility of international food and commodity prices amid the global liquidity glut, as well as the progressive feed-through of higher housing rentals”.

FocusEconomics Consensus Forecast panellists expect inflation to average 4.0% in 2013, which is up 0.1 percentage points from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%.



Hong Kong: Inflation moderates markedly in January

February 22, 2013

In January, annual inflation fell to 3.0% from the 3.7% tallied in the previous two months. The reading fell short of market expectations of a 3.2% rate and marked, in fact, the lowest level seen since July 2012. According to the statistical institute, the monthly print was mainly influenced by higher prices for housing, food as well as for electricity, gas and water. That said, prices in January also reflected a seasonal effect stemming from the Lunar New Year holidays, which fell last year in late January but this year in mid-February. As a result of the moderation observed in January, annual average inflation eased from 4.1% in December to 3.8% in January.

A government spokesman stated that inflation is likely to remain contained in the near term, mainly due to weak economic performance at home and a more benign increase in import prices. That said, “further down the road, the volatility of international food and commodity prices amid the global liquidity glut, coupled with the rise in local housing rentals over the past year, may pose some upside risks to inflation”.

FocusEconomics Consensus Forecast panellists expect inflation to average 3.9% in 2013, which is unchanged from last month’s forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%.



Hong Kong: Inflation remains stable in October

November 22, 2012

In October, annual inflation remained unchanged at September's 3.8%. The reading defied market expectations of a 3.6% rate. According to the statistical institute, higher prices for housing and food drove the increase. Annual average inflation, however, eased from 4.6% in September to 4.4% in October, the lowest level since August 2011. A government spokesman noted that lower price pressures will contain inflation for the remainder of the year, but stated that "the volatility of international food and commodity prices amid the global liquidity glut and the renewed pick-up in local housing rentals in recent months may pose some upside risks to inflation further down the road."



Hong Kong: Inflation inches up in September

October 22, 2012

Annual inflation inched up from 3.7% in August to 3.8% in September. The reading defied market expectations of a 3.6% rate. According to the statistical institute, higher prices for housing and food drove the increase. Annual average inflation, however, eased from 4.7% in August to 4.6% in September, the lowest level since September 2011. A government spokesman stated that "the austere economic environment and more moderate increases in import prices should help to contain inflation in the rest of the year. Nonetheless, the volatility of food and commodity prices amid abundant global liquidity is an area to watch over".



Hong Kong: Inflation bounces back in August

September 20, 2012

Annual inflation jumped from 1.6% in July, the lowest level seen since July 2010, to 3.7% in August. The reading fell short of market expectations of a 3.9% rate. According to the statistical institute, prices for housing rose notably due to the timing of public housing rentals waivers, which were conducted in July and August this year, but in August and September last year, distorting the annual comparison. Annual average inflation, however, eased from 4.9% in July to 4.7%, the lowest level since September 2011. A government spokesman stated that "given the more difficult economic environment and the more moderate increases in import prices, there should still be some room for inflation to ease further in the near term". The government expects headline inflation to average 3.7% this year.



Hong Kong: Inflation decelerates sharply in July on government distortion

August 21, 2012

Annual inflation fell from 3.7% in June to 1.6% in July, the lowest level seen since July 2010 and well below market expectations of a 3.5% rate. According to the statistical institute, prices for housing fell notably due to the government's payment of public housing rentals, which did not take place in the same month last year. Annual average inflation followed suit and eased from 5.4% in June to 4.9%, the lowest level since October 2011. A government spokesman stated that given the more difficult economic environment as well as the deceleration of import prices, inflation is likely to recede further in the coming months.



Hong Kong: Inflation moderates in June

July 23, 2012

Annual inflation fell from 4.3% in May to 3.7% in June, the lowest level seen since February 2011 and below market expectations of a 3.8% rate. According to the statistical institute, higher prices for food and housing where partially offset by a plunge in electricity, gas and water prices, largely due to the government's electricity charge subsidy. Annual average inflation followed suit and eased from 5.5% in May to 5.4%, the lowest level recorded so far this year. A government spokesman stated that inflation is likely to recede further in the coming months, given the difficult external economic environment and the deceleration of import prices. The government expects headline inflation to moderate to 3.5% this year.



Hong Kong: Inflation eases in May

June 21, 2012

Annual inflation fell from 4.7% in April to 4.3% in May, the lowest level since February 2011 and in line with market expectations. According to the statistical institute, higher prices for food and housing where partially offset by a plunge in electricity, gas and water prices, largely due to the government's electricity charge subsidy. Annual average inflation followed suit, and eased from 5.6% in April to 5.5%, the lowest level so far this year.



Hong Kong: Inflation accelerates in March

April 23, 2012

In March, consumer prices added 0.5% over the previous month, which contrasted the 0.2% drop recorded in February. According to the statistical institute, higher prices for clothing and footwear as well as for food were the main drivers behind the monthly increase. Annual inflation rose to 4.9% in March from 4.7% in February, exceeding market expectations, which had inflation edging up to 4.8%. Despite the increase, annual average inflation remained unchanged at February's 5.6%. A government spokesman stated that



Hong Kong: Inflation moderates sharply in February

March 22, 2012

In February, consumer prices dropped 0.2% over the previous month, which contrasted the 0.9% increase recorded in January. According to the statistical institute, lower prices for clothing and footwear as well as for services were the main drivers behind the monthly drop. Annual inflation fell to 4.7% in February from 6.1% in January, exceeding market expectations which had inflation moderating to 5.2%. However, the reading was influenced by a base effect due to the Lunar New Year celebration, which had led inflation to spike in January. Despite the decline, annual average inflation inched up from 5.5% in January to 5.6% in February. A government spokesman stated that ?with global food prices peaking out since early 2011 as well as a slowing local economy, inflation is expected to come down over the course of 2012.? The government expects headline inflation to moderate to 3.5% this year.



Hong Kong: Inflation quickens in January

February 20, 2012

In January, consumer prices rose 0.9% over the previous month, which was above the 0.6% increase recorded in December. According to the statistical institute, food prices and housing rentals were the main drivers behind the monthly increase. Annual inflation rose to 6.1% in January from 5.7% in December, which overshot market expectations of 5.8%. The reading was influenced by the Lunar New Year celebration, which boosted consumption during the month. Moreover, annual average inflation edged up from 5.3% in December to 5.5% in January. Despite the monthly rise, a government spokesman stated that ?with the recent retreat of global food and commodity prices as well as slower local economic growth, inflation should gradually come down over the course of 2012?. The government expects headline inflation to moderate to 3.5% this year.



Hong Kong: Inflation accelerates in September

October 21, 2011

In September, consumer prices rose 0.4% over the previous month, which contrasted the 2.0% drop recorded in August. The rise was caused by a sharp increase in prices of clothing and footwear as well as food. As a result, annual inflation inched up from 5.7% in August to 5.8% in September, which was above market expectations of a 5.4% increase. Annual average inflation rose from 4.2% in August to 4.5% in September. A government spokesman stated that ?inflation is likely to climb up further in the near term before peaking out, as the lagged effects from earlier surges in international food prices and market rentals continue to filter through.? In its August economic outlook, the government expects inflation to average 5.4% this year.



Hong Kong: Inflation plummets in August

September 22, 2011

In August, consumer prices fell 2.0% over the previous month, well below the 0.1% drop recorded in July. The drop was caused by a sharp decrease in housing prices owing to the government's payment of public housing rent, which more than offset higher prices for food. As a result, annual inflation plunged from 7.9% in July to 5.7% in August, which was virtually in line with market expectations of 5.8%. Despite the monthly decrease, annual average inflation rose from 3.9% in July to 4.2% in August. A government spokesman confirmed that consumer prices will be subject to upward pressures in the coming months, due to both external and domestic factors including high global food and commodity prices. However, in the economic outlook from August, the government left its inflation forecast for this year unchanged at 5.4%.



Hong Kong: Inflation continues to rise on higher food and rental prices

July 21, 2011

In June, consumer prices rose 0.5% over the previous month, unchanged from the 0.5% rise recorded in May. The increase was driven by higher prices for food as well as for housing, which were pushed up on the back of higher private rental prices. The monthly price increase drove annual inflation up from 5.2% in May to 5.6% in June, which matched market analyst expectations and marked the fastest pace since July 2008. Annual average inflation rose from 3.1% in May to 3.3%. A government spokesman confirmed that consumer prices will be subject to upward pressures in the coming months, due to both external and domestic factors including high global food and commodity prices. The government expects inflation to reach 5.4% this year.



Hong Kong: Inflation rises to 32-month high

May 23, 2011

In April, consumer prices rose 0.7% over the previous month, above the 0.3% rise recorded in March. The increase was driven by higher prices for clothing and footwear as well as for transport. As a result of the pronounced monthly price increase, annual inflation rose from 4.4% in March to 4.6% in April, which was in line with market analyst expectations and marked the fastest pace since August 2008. In addition, annual average inflation rose from 2.7% in March to 2.9%. A government spokesman confirmed that consumer prices are subject to upward pressures in the near term, due to rising food prices and private residential rentals. On May 13, the government raised its inflation forecast for this year to 5.4% from its previous 4.5% estimate.



Hong Kong: Inflation jumps to highest level in more than two years

April 21, 2011

In March, consumer prices rose 0.3% over the previous month, well below the 1.1% rise recorded in February. The increase was driven by higher prices for alcoholic drinks and tobacco, which increased 17.1% over the previous month due to the increase in tobacco duty. Lower prices for food and miscellaneous services mitigated the impact of the tax rise. In spite of the subdued monthly price increase, annual inflation jumped from 3.7% in February to 4.6% in March, which exceeded market analyst expectations of 4.2% and marked the fastest pace since August 2008. As a result, annual average inflation rose from 2.7% in February to 2.9%. A government spokesman confirmed that consumer prices are subject to upward pressures in the near term, due to rising food prices and private residential rentals. The government sees inflation averaging 4.5% this year.



Hong Kong: Inflation inches up in February

March 22, 2011

In February, consumer prices rose 1.1% over the previous month, well above the 0.6% rise recorded in January. Higher prices for food (+2.1% month-on-month) and housing (+3.9% mom) drove the monthly increase. Annual inflation inched up from 3.6% in January to 3.7% in February, exceeding market analyst expectations that the rate would remain unchanged. As a result, annual average inflation also inched up from 2.6% in January to 2.7%. A government spokesman confirmed that consumer prices are subject to upward pressures in the near term, due to rising food and commodity prices. The government sees inflation averaging 4.5% this year.



Hong Kong: Inflation accelerates in January

February 22, 2011

In January, consumer prices rose 0.6% over the previous month, up from the 0.5% rise recorded in December. Higher prices for food (+1.5% month-on-month) and housing (+0.6% mom) contributed to the increase. Annual inflation jumped from 3.1% in December to 3.6%, exceeding the 3.3% inflation rate expected by market analysts. As a result, annual average inflation rose from 2.4% in December to 2.6%. A government spokesman confirmed that consumer prices are subject to upward pressures in the near term, due to rising food and commodity prices. In addition, domestic price pressures, such as wages and rents, continue to rise in tandem with the economic recovery.



Hong Kong: Inflation accelerates in December

January 20, 2011

In December, consumer prices rose 0.5% over the previous month, which was up a notch from the 0.4% rise recorded in November. The increase was the result of higher prices for food (+0.8% month-on-month) and housing (+0.5% mom). Annual inflation rose from 2.9% in November to 3.1%, slightly exceeding market expectations, which had seen inflation at 3.0%. As a result, annual average inflation rose from 2.2% in November to 2.4%. A government spokesman confirmed that consumer prices are subject to upward pressures in the near term, due to the pick-up in import prices. In addition, domestic price pressures, such as wages and rents, continue to rise in tandem with the economic recovery.



Hong Kong: Inflation remains unchanged in October

November 22, 2010

In October, consumer prices jumped 2.1% over the previous month, which was well above the 0.3% rise recorded in September. The increase was the result of higher prices for housing (+5.9% month-on-month), as the September waiver of public housing rentals by the Housing Authority led to a low base of comparison. Despite the monthly price jump, annual inflation remained unchanged at September's 2.6%, exceeding market expectations, which had seen inflation moderating to 2.4%. However, annual average inflation inched up from 2.0% in September to 2.1%. A government spokesman stated that consumer prices are subject to upward pressures in the near term, as wages and rents continue to rise in tandem with the economic recovery. In addition, the new round of quantitative easing in the United States will also pose upside risks to inflation. The government sees inflation averaging 2.5% this year.



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