Hong Kong Inflation January 2018

Hong Kong

Hong Kong: Inflation stable in January as electricity charges offset timing of Lunar New Year's drag on prices

February 22, 2018

Inflation was stable from a month earlier at 1.7% in January, with food and housing prices each rising at a broadly similar pace to December. Notably, a spike in electricity charges in January due to a significant base effect induced by last year’s special fuel rebate was roughly offset by the one-off drag on prices stemming from the timing of this year’s Lunar New Year holiday, which occurred in February this year but in January last year.

For the three-month period from November to January, the average of the month-on-month variations in consumer prices was 0.2% in seasonally-adjusted terms, ticking down from the 0.3% average increase seen in the three months up to December. Meanwhile, annual average inflation in January was stable from December at 1.5%.

A government spokesperson noted that:

“Looking ahead, inflation pressure may increase slightly in the rest of the year amid a stronger global economy and continued expansion of the local economy. For February, the year-on-year increases in the CPIs are likely to see a temporary pick-up due to the distortions caused by the difference in timing of the Lunar New Year.”

FocusEconomics Consensus Forecast panelists expect inflation to average 2.3% in 2018, which is unchanged from last month’s forecast. For 2019, the panel also expects inflation to average 2.3%.


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Hong Kong Inflation Chart

HongKong Inflation January 2018

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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