Hong Kong Inflation

Hong Kong

Hong Kong: Inflation moderates to lowest level in over a year

May 22, 2014

Annual inflation came in at 3.7% in April, which was down from the 3.9% tallied in the previous month and marked the lowest rate since March 2013. The print slightly overshot the 3.6% market analysts had expected. According to the Census and Statistics Department, the result was mainly driven by higher prices for alcoholic beverages and tobacco as well as for housing.

In April, consumer prices rose 0.2% over the previous month in seasonally-adjusted terms, which was below the 0.3% increase tallied in March.

A government spokesman stated that, “the latest figures pointed to continued easing in inflationary pressures, as the slower private rental increase continued to feed through while external price pressures stayed tame. The temporary decreases in the prices of fresh vegetables against a high base of comparison in the same month last year was an additional contributing factor relevant in April.” In addition, the spokesman stated that, “looking ahead, the upside risks to inflation should remain limited in the coming months, with rentals easing on a broad front, wage rise staying steady, and imported inflation being modest.”

The government expects inflation to reach 4.6% 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%.

Author: Ricard Torné, Lead Economist

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Hong Kong Inflation Chart

Hong Kong Inflation April 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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