Hong Kong: Inflation slows to nine-month low in February
March 20, 2014
Annual inflation came in at 3.9% in February, which was well below the 4.6% recorded in January. The print slightly overshot the 3.8% market analysts had expected and represented the lowest rate in nine months. According to the Census and Statistics Department, the result was mainly driven by higher prices for electricity, gas and water, and for housing. Annual average inflation inched down from 4.5% in January to 4.4% in February. In February, consumer prices rose 0.3% over the previous month in seasonally-adjusted terms, which was down from the 0.4% increase tallied in January. The weaker rate observed in February was mostly attributable to seasonal effects stemming from the Lunar New Year holiday, which fell in late January to early February this year versus 2013 when it occurred in mid-February. A government spokesman stated that, “inflation pressure remained largely contained.” In addition, the spokesman affirmed that, “Looking ahead, the generally mild imported inflation and the feed-through of the milder increases in fresh-letting residential rentals in 2013 should help contain the upside risks to inflation in the near term.” The government expects inflation to reach 4.6% in 2014. FocusEconomics Consensus Forecast panelists expect inflation to average 3.8% in 2014, which is up 0.1 percentage points from last month's forecast. For 2015, the panel expects annual average inflation to moderate to 3.5%.