Hong Kong: Inflation plummets in August
September 22, 2011
In August, consumer prices fell 2.0% over the previous month, well below the 0.1% drop recorded in July. The drop was caused by a sharp decrease in housing prices owing to the government's payment of public housing rent, which more than offset higher prices for food. As a result, annual inflation plunged from 7.9% in July to 5.7% in August, which was virtually in line with market expectations of 5.8%. Despite the monthly decrease, annual average inflation rose from 3.9% in July to 4.2% in August. A government spokesman confirmed that consumer prices will be subject to upward pressures in the coming months, due to both external and domestic factors including high global food and commodity prices. However, in the economic outlook from August, the government left its inflation forecast for this year unchanged at 5.4%.