Hong Kong: Inflation remains stable in March
April 22, 2014
Annual inflation came in at 3.9% in March, which was unchanged over the previous month's result. The print undershot both the 4.2% market analysts had expected and the 4.3% recorded in the first two months of the year-the figure is compared to the average rate of increase in January and February in order to smooth out seasonal effects stemming from the Lunar New Year holiday. According to the Census and Statistics Department, the result was mainly driven by higher prices for alcoholic beverages and tobacco as well as for housing.
In March, consumer prices rose 0.3% over the previous month in seasonally-adjusted terms, which matched the result tallied in February.
A government spokesman stated that, “the lower underlying inflation rate in March compared with the average rate in January and February was due partly to the year-on-year decline in the costs of package tours, which resulted from a high base of comparison as the Easter holidays fell in late March last year but in mid-April this year.” In addition, the spokesman stated that, “looking ahead, the continued feed-through of the milder increases in fresh-letting residential rentals since early 2013 as well as the modest imported inflation should help contain inflation in the near term.”
The government expects inflation to reach 4.6% in 2014. FocusEconomics Consensus Forecast panelists expect inflation to average 3.8% in 2014, which is up 0.1 percentage points from last month's forecast. For 2015, the panel expects annual average inflation to moderate to 3.5%.