Hong Kong’s inflation decelerates marginally in December, upside risks to inflation likely to remain contained

Hong Kong’s Census and Statistics Department released the consumer price index figures for December today. The overall inflation came in at 2.5 percent year-on-year, a slight slowdown from 2.6 percent. The deceleration was mainly because of the smaller rises in private housing rentals and the costs for meals bought away from home. Netting out the effects of all Government’s one-off relief measures, the year-on-year rate of rise in the Composite CPI in December 2018 was 2.9 percent, remaining virtually unchanged as compared to November 2018.

On a seasonally adjusted basis, the average monthly pace of rise in the Composite CPI for the three-month period from October to December was 0.2 percent, and that for the three-month period from September to November 2018 was 0.3 percent.

Among various CPI components, year-on-year rises in prices were seen in electricity, gas and water; food; miscellaneous services; housing; alcoholic drinks and tobacco. Meanwhile, durable goods, clothing and footwear recorded decline in prices. In the fourth quarter, the Composite CPI rose 2.6 percent year-on-year. For the whole of 2018, the Composite CPI averaged 2.4 percent.

“In the near term, the upside risks to inflation should be contained, as imported inflation has stayed moderate and as pressures on local rentals have weakened somewhat of late. The Government will monitor the situation closely, particularly the impact on the lower-income people”, stated a Government spokesman.