Hong Kong Inflation

Hong Kong

Hong Kong: Inflation decelerates in October

November 20, 2014

Annual inflation receded from 6.6% in September to 5.2% in October. The reading overshot the 4.0% that markets had expected. According to the Census and Statistics Department, the high reading in September was mainly due to the low base of comparison, which resulted from the government’s one-off payment for public housing rentals in September of last year. There was not such an effect in October. A government spokesman explained that, “underlying inflation held largely stable in the recent period, having eased successively since late 2013. The headline inflation rate was higher than the underlying rate because the Government's rates concession ended in October.”

Consumer prices increased 0.7% over the previous month in seasonally-adjusted terms in October, which followed the 0.5% increase recorded in the previous month and marked the largest increase since December 2013. Meanwhile, annual average variation in consumer prices inched up from 4.2% in September to 4.3% in October.

The government expects inflation to reach 4.4% in 2014. FocusEconomics Consensus Forecast panelists expect inflation to average 3.9% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects annual average inflation to moderate to 3.5%, which is also unchanged from last month’s forecast.

Author:, Economist

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Hong Kong Inflation Chart

Hong Kong Inflation October 2014

Note: Year-on-year and annual average variation of consumer price index in %.
Source: Census and Statistics Department Hong Kong and FocusEconomics Consensus Forecast.

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