Hong Kong: Inflation inches down in December
Inflation ticked down to 2.9% in December from 3.0% in November. When accounting for the effects of one-off government relief measures, inflation was stable at November’s 2.9% in December. The headline print was primarily driven by a sharper price decrease for alcoholic drinks and tobacco, and utilities, while transport prices increased at a softer pace in December. That said, food and housing costs remained elevated in the month.
For the October-December period, the average month-on-month increase in consumer prices in seasonally-adjusted terms was 0.1%, which is unchanged from the average increase in the three-month period ending in November.
Looking ahead, inflation should continue to ease as economic activity remains sluggish, although pork prices will remain elevated until the African swine flu outbreak subsides in China, where pork supply has been devastated. Moreover, the fourth quarter’s rise in the unemployment rate and ongoing deteriorations in the manufacturing, retail and tourism sectors should keep price pressures tepid.