Hong Kong: Inflation declines to lowest level since May in October
Inflation dropped to 1.8% in October, following Septembers 4.3%. October’s result marked the lowest inflation rate since May, and was driven by easing price pressures for housing, food and transport. Inflation has been low in the international context so far this year—OECD average inflation was 10.7% in October. The countrys U.S. dollar peg, which has seen the trade-weighted exchange rate rise this year on a stronger USD, is one factor at play. Government subsidies, the low weight of energy in the CPI basket, weak domestic demand, and lower rent prices amid emigration are also weighing on price pressures.
The trend was unchanged, with annual average inflation coming in at September’s 1.9% in October.
Lastly, consumer prices increased a seasonally adjusted 0.29% from the previous month in October, accelerating from September’s 0.10% increase. October’s uptick was the highest reading since June.