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%.