Hong Kong’s headline inflation accelerates in December, inflation risks to remain contained in near term

Hong Kong’s overall consumer price inflation accelerated year-on-year in December. According to the Census and Statistics Department, the overall CPI rose 1.2 percent, virtually unchanged from November’s year-on-year figure. Excluding the impacts of all Government’s one-off relief measures, the year-on-year pace of rise in the Composite CPI came in at 2 percent in December. This was a tad smaller than that in November, mainly because of the smaller rises in the prices of fresh vegetables.

Looking at various CPI components, increases in prices were registered in December 2016 for meals purchased outside, food, miscellaneous goods, miscellaneous services, alcoholic drinks and tobacco, and transport.

For the December quarter, Hong Kong’s consumer price inflation accelerated 1.2 percent year-on-year. For 2016 as a whole, the consumer price inflation was on average 2.4 percent higher than in the preceding 12-month period.

A government spokesman stated that inflation pressure remained moderate in December 2016. He further commented that inflation risks are expected to stay contained in the near term, given the weak import prices and tame local cost pressures. The spokesman added that the government would continue to keep a watch on the inflation developments closely, especially its effect on the lower-income people.