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.