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.
Author: David Ampudia, Economist