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%.
Author: Ricardo Aceves, Senior Economist