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.”
Author: Christopher Thomas, Economist