Hong Kong Inflation November 2016

Hong Kong

Hong Kong: Inflation steady at over six-year low

December 20, 2016

Inflation was largely unchanged in November at October’s 1.2%, which had marked the lowest reading since July 2010. Since hitting a 17-month high in August, the annual change in consumer prices in Hong Kong has gradually decelerated. November’s figure reflected a decline in prices for clothing and footwear products and durable goods. Conversely, housing prices increased slightly, while prices for food products and transportation rose notably.

A government spokesman suggested that, looking ahead, “inflation risks should remain contained in the near term, given the still-low global inflation and moderate rises in local costs”. The recent hike in the U.S. interest rate will add further downward pressure on consumer prices, particularly housing and rental, on the back of a downward correction in Hong Kong’s residential property prices due to negative interest rates.

For the three-month period from September to November, the average of the month-on-month variations in consumer prices came in at 0.3% in seasonally-adjusted terms, which matched the reading seen in the three months up to October. Meanwhile, annual average inflation was 2.5% in November, which was slightly below October’s 2.6% reading.

FocusEconomics Consensus Forecast panelists expect inflation to average 2.1% in 2017, which is up 0.2 percentage points from last month’s forecast. For 2018, the panel expects inflation of 2.3%.

Author:, Economist

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Hong Kong Inflation Chart

Hong Kong Inflation November 2016

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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