Hong Kong: Inflation picks up in February on Lunar New Year base effect
March 20, 2018
Inflation picked up from 1.7% in January to 3.1% in February—the highest reading since August 2016. February’s acceleration, however, was largely due to a base effect stemming from the timing of this year’s Lunar New Year holiday, which fell in February this year but in January last year. As such, food prices rose notably faster in February compared to January, while housing prices increased at a broadly similar pace.
For the three-month period from December to February, the average of the month-on-month variations in consumer prices was 0.3% in seasonally-adjusted terms, a tad above the 0.2% average increase seen in the three months up to January. Meanwhile, annual average inflation edged up from 1.5% in January to 1.8% in February.
A government spokesperson noted that:
“Temporary factors aside, with the continued expansion in the global and local economies, the underlying inflation pressure may increase somewhat over the course of 2018, though the inflation rate is expected to be contained at a moderate level.”
Author: Javier Colato, Economist