Hong Kong: Inflation moderates sharply in August
September 23, 2013
Annual inflation slowed sharply to 4.5% in August from 6.9% in July, which had marked the highest level since July 2011. The print slightly overshot market expectations of 4.4%. According to the Census and Statistics Department, the print was mainly driven by higher prices for electricity, gas and water and for housing. Annual average inflation was steady at July's 4.1%.
A government spokesman stated that inflation, "is still subject to modest upside risks in the coming months," mainly due to the lagging 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 amid subdued imported inflation and the recent mild increase in housing rentals.
The government revised its inflation projection for this year and now expects inflation to average 4.3%. FocusEconomics Consensus Forecast panelists expect inflation to average 4.0% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects annual average inflation to moderate to 3.6%, which is down 0.1 percentage points from last month's estimate.