Hong Kong Inflation Rate Steady at 5-Month High in January

The consumer price index in Hong Kong rose 1.7 percent year-on-year in January of 2018, the same pace as in the preceding month. Still, the inflation rate remains at its highest level since August amid higher cost of electricity, gas and water and clothing.
Census and Statistics Department | Luisa Carvalho | luisa.carvalho@tradingeconomics.com 2/22/2018 4:20:20 PM
Year-on-year, prices increased at a faster pace for electricity, gas and water (10.2 percent vs +/-0.1 percent), mainly due to a low base effect after the special fuel rebate in electricity was introduced in January last year.  Also, inflation was up for clothing and footwear (2.6 percent vs 1.4 percent) and miscellaneous goods (1.4 percent vs 1.3 percent) while rremained the same for housing (2.5 percent). 

Meanwhile, cost slowed for food (2.3 percent vs 2.4 percent), especially food excluding meals bought away from home (1.9 percent vs 2.8 percent) and transport (1.4 percent vs 1.7 percent). Also, prices fell for miscellaneous services (-1.5 percent vs 0.1 percent); durable goods (-1.6 percent vs -1.4 percent) and alcoholic beverages (-0.2 percent vs -0.3 percent).

On a monthly basis, consumer prices were down 0.1 percent, compared to a 0.4 percent increase in December.

Underlying consumer inflation, which excludes the effects of one-off government relief measures was also 1.7 percent, virtually unchanged from December. A Government spokesman said that a spike in electricity charge due to the low base of comparison created by the special fuel rebate a year ago was broadly offset by the temporary drag effect from the difference in timing of the Lunar New Year (which fell in mid-February this year but in late January last year) that led to year-on-year declines in items such as charges for package tours.

Looking ahead, inflationary pressures may increase slightly in the rest of the year amid a stronger global economy and continued expansion of the local economy, the Government spokesman said. For February, the year-on-year inflation rate is likely to see a temporary pick-up due to the distortions caused by the difference in timing of the Lunar New Year.

Hong Kong Inflation Rate Steady at 5-Month High in January