Hong Kong consumer price inflation likely to have accelerated in August

Consumer prices data for Hong Kong is set to be released this week. According to a DBS Bank research report, the headline prices are likely to have risen at a more rapid pace of 2.5 percent year-on-year in August from July’s 2.4 percent.

Favourable domestic economic conditions in the first half of 2018 and the feed through of higher rents in the past year should uphold inflationary pressures. The widespread pork disease in China might also increase imported food prices, but not break out of range.

Pressure on overall import prices are likely to stay in check because of a strengthening U.S. dollar and softening CNY. The launch of new government subsidies is expected to contain the inflation at a moderate level, added DBS Bank.