City's inflation index on an easing trend
Updated: 2012-11-23 06:50
By Li Tao(HK Edition)
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Headline CPI at 3.8% in Oct versus Sept's 3.9%, govt statistics indicate
Inflation in Hong Kong has shown signs of easing with the underlying CPI figure rising 3.8 percent year-on-year last month, down from 3.9 percent in September, as upward trend of private housing rentals and food prices moderated in the city, the government said on Thursday.
Headline CPI rose 3.8 percent year-on-year last month, same as that of September, data released by the Census and Statistics Department on Thursday showed. It compared with the 3.6 percent median of 14 economists' estimates compiled by Bloomberg News.
A government spokesman said October consumer prices remained on a general easing trend in Hong Kong due to the narrower year-on-year increases in the two major components - food and private housing rentals, which expanded 4.2 percent and 5.2 percent year-on-year, respectively.
Estimating that inflation should remain contained for the rest of the year on slower local economic growth and lower imported inflation, the volatility of international food and commodity prices amid the global liquidity glut and the renewed pick-up in local housing rentals in recent months may still pose some upside risks to inflation further down the road, the spokesman added.
Paul Tang, chief economist from Bank of East Asia, said the decreases of food prices on the mainland have effectively driven down the food sale prices in the city.
Meanwhile, the weakening job market will also affect people's spending activities, which, is also likely to further cool the price pressures in Hong Kong in the following months, Tang told China Daily in a telephone interview.
"The pace of price increases has been moderating, though at a slower speed than we had expected," JP Morgan Chase Bank said in a note on Thursday.
"Rentals picked up again in recent months, its lagged effect will put pressure on the inflation picture during the second half of next year," wrote Jiang Lu, an economist of the bank, who added that inflation forecast remains unchanged at 4 percent in 2012.
A Centaline Property Agency Ltd's report showed on Thursday that Hong Kong's private rental in the city's 85 key residential estates has further climbed 2.3 percent to HK$22.2 per square foot last month from September. Private rent in the city has accumulatively gained 17.5 percent over the past eight months, according to the property agency.
On Nov 16, Hong Kong government lifted its headline and underlying CPI forecasts for the year to 3.9 percent and 4.5 percent, respectively, from estimates of 3.7 percent and 4.3 percent made in August, citing global food prices hike, inflow of hot money, and the renewed pick-up in local residential rentals as reasons for the hike in prices.
litao@chinadailyhk.com
(HK Edition 11/23/2012 page2)