HK inflation rises to 34-month high
Source: Bloomberg News |
June 22, 2011, Wednesday
|
Print Edition
Print Edition
HONG Kong's inflation accelerated to a 34-month high in May, pushed up by escalating food and home rental prices.
Consumer prices gained 5.2 percent from a year earlier, more than the median 5 percent estimate of 13 economists in a Bloomberg News survey. The figure was higher than the 4.6 percent increase in April.
Financial Secretary John Tsang said on June 9 that inflation is "heating up" imposing a "challenge" to the city, as rising global food costs and the introduction of a minimum wage last month pushes up consumer prices. Hong Kong's currency peg to the US dollar deprives the city of the monetary tool to rein in prices through interest rate adjustments.
"The city's inflation rate will continue to climb," Raymond Yeung, a senior economist at Australia & New Zealand Banking Group Ltd in Hong Kong, said before yesterday's report. Droughts in China are pushing up food costs and residential rentals are rising on higher home prices, he said.
Yeung said inflation may exceed 6 percent by September.
Global food prices jumped 37 percent in May from a year earlier, according to the Rome-based United Nations Food and Agriculture Organization. China, a major food supplier to Hong Kong, experienced a drought along the Yangtze river after floods, which may disrupt food supply and drive up prices.
At the same time, Hong Kong's private housing rentals rose 1.5 percent last month from April to HK$19.90 (US$2.56) a square foot, the highest level in more than 13 years, Centaline Property Agency Ltd, the city's biggest privately held realtor, said in a report yesterday.
Tsang's government started subsidizing electricity and public housing-rental waivers as temporary measures to help residents cope with rising costs. Those measures may distort Hong Kong's consumer-price readings. Excluding such effects, inflation was 5.1 percent last month, compared with a 4.4 percent in April, the report showed.
Hong Kong introduced a HK$28 per-hour minimum wage on May 1, a move that may fuel gains in pay and consumer prices, Tsang said.
Consumer prices gained 5.2 percent from a year earlier, more than the median 5 percent estimate of 13 economists in a Bloomberg News survey. The figure was higher than the 4.6 percent increase in April.
Financial Secretary John Tsang said on June 9 that inflation is "heating up" imposing a "challenge" to the city, as rising global food costs and the introduction of a minimum wage last month pushes up consumer prices. Hong Kong's currency peg to the US dollar deprives the city of the monetary tool to rein in prices through interest rate adjustments.
"The city's inflation rate will continue to climb," Raymond Yeung, a senior economist at Australia & New Zealand Banking Group Ltd in Hong Kong, said before yesterday's report. Droughts in China are pushing up food costs and residential rentals are rising on higher home prices, he said.
Yeung said inflation may exceed 6 percent by September.
Global food prices jumped 37 percent in May from a year earlier, according to the Rome-based United Nations Food and Agriculture Organization. China, a major food supplier to Hong Kong, experienced a drought along the Yangtze river after floods, which may disrupt food supply and drive up prices.
At the same time, Hong Kong's private housing rentals rose 1.5 percent last month from April to HK$19.90 (US$2.56) a square foot, the highest level in more than 13 years, Centaline Property Agency Ltd, the city's biggest privately held realtor, said in a report yesterday.
Tsang's government started subsidizing electricity and public housing-rental waivers as temporary measures to help residents cope with rising costs. Those measures may distort Hong Kong's consumer-price readings. Excluding such effects, inflation was 5.1 percent last month, compared with a 4.4 percent in April, the report showed.
Hong Kong introduced a HK$28 per-hour minimum wage on May 1, a move that may fuel gains in pay and consumer prices, Tsang said.
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