HK inflation races to high 4.6%
Source: Bloomberg News |
May 24, 2011, Tuesday
|
Print Edition
Print Edition
HONG Kong's inflation accelerated to a 32-month high of 4.6 percent in April from a year earlier, driven by higher food and housing rental costs.
Yesterday's figure, released by the government on its website, matched the median estimate of 12 economists in a Bloomberg News survey and was higher than the revised 4.4 percent gain in March.
The government raised its annual inflation forecast to the highest in 14 years on May 13 on more expensive food, labor and import costs. Hong Kong's currency peg to the US dollar robs the city of an independent interest-rate policy, leaving the Hong Kong Monetary Authority, the de-facto central bank, with limited tools to combat higher prices.
"Inflation is brewing in Hong Kong, fanned by a mix of drivers, with mainland food prices and housing rental costs leading the pack," Donna Kwok, a Hong Kong-based economist at HSBC Holdings Plc, said before the report. "The sting of higher prices may cool household spending growth by mid-year."
The government boosted its estimate for inflation this year to 5.4 percent, from a previous forecast of 4.5 percent, which would be the highest since 1997. It also increased its estimate for economic expansion this year to 5 percent to 6 percent from a previous range of 4 percent to 5 percent due to "robust" domestic demand.
"Inflation is likely to climb up further in the coming months with domestic and external factors both adding to price pressures," the government said yesterday.
Yesterday's figure, released by the government on its website, matched the median estimate of 12 economists in a Bloomberg News survey and was higher than the revised 4.4 percent gain in March.
The government raised its annual inflation forecast to the highest in 14 years on May 13 on more expensive food, labor and import costs. Hong Kong's currency peg to the US dollar robs the city of an independent interest-rate policy, leaving the Hong Kong Monetary Authority, the de-facto central bank, with limited tools to combat higher prices.
"Inflation is brewing in Hong Kong, fanned by a mix of drivers, with mainland food prices and housing rental costs leading the pack," Donna Kwok, a Hong Kong-based economist at HSBC Holdings Plc, said before the report. "The sting of higher prices may cool household spending growth by mid-year."
The government boosted its estimate for inflation this year to 5.4 percent, from a previous forecast of 4.5 percent, which would be the highest since 1997. It also increased its estimate for economic expansion this year to 5 percent to 6 percent from a previous range of 4 percent to 5 percent due to "robust" domestic demand.
"Inflation is likely to climb up further in the coming months with domestic and external factors both adding to price pressures," the government said yesterday.
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