Hong Kong Inflation

Inflation decelerates in June from the prior month

Latest reading: Consumer prices increased 1.9% on a year-on-year basis in June, following a 2.0% rise in the previous month. Relative to the previous month's data, there were milder price pressures for food and non-alcoholic beverages (+0.4% on a year-on-year basis vs +0.7% in May) and clothing and footwear (+0.7% vs +1.0% in May). In contrast, there were more notable price pressures for transportation (+5.3% vs +5.2% in May) and electricity, gas and water (+9.2% vs +6.6% in May). Meanwhile, the variation in housing prices was the same as in the prior month (+1.1% in June and May). Finally, consumer prices were stable in June in month-on-month terms for the second consecutive month.

Panelist insight: EIU analysts commented on the impact of the Iran energy crisis on the inflation outlook: “Although higher global energy prices have contributed to stronger producer price inflation, consumer prices will remain relatively insulated from the energy price shock in 2026 because the territory imports most of its energy and goods from the mainland—where price shocks will be largely absorbed—and a diverse range of global energy suppliers. Despite elevated pump prices, fuel has a small weighting in the consumer price basket, and heavy reliance on public transport will limit the pass-through. Furthermore, structural tariff-stabilisation mechanisms will continue to smooth the impact of higher fuel costs on utility bills.”

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