Inflation puts Hong Kong at risk
Source: Bloomberg News |
October 22, 2011, Saturday
|
Print Edition
Print Edition
HONG Kong's inflation accelerated in September after moderating from a 15-year high the previous month, as housing rentals increased in an economy risking recession.
Consumer prices rose 5.8 percent from a year earlier, the city government said on its website. That compared with a 5.7 percent increase in August and the median 5.4 percent estimate in a Bloomberg News survey of 13 economists. Excluding the impact of temporary government subsidies, the underlying rate was 6.4 percent, up from 6.3 percent the previous month.
Hong Kong Chief Executive Donald Tsang said the territory is experiencing "enormous inflationary pressure" from rising wages, and announced a public housing rental waiver to help residents cope with increasing costs. At the same time, the prospect of slower growth in the US and the European debt crisis are hurting the economy by weakening export demand.
Donna Kwok, an economist at HSBC, said: "Inflation is showing no sign of cooling down, as solid wage growth and household spending continue to keep the economy operating close to capacity.
"As business conditions soften in response to persistent global economic uncertainties, inflationary pressures are likely to peak in the coming months."
Tsang last week reiterated the government's August estimate that the pace of increase in consumer prices will accelerate to 5.4 percent this year - the fastest pace since 1997 - from 2.38 percent last year.
Consumer prices rose 5.8 percent from a year earlier, the city government said on its website. That compared with a 5.7 percent increase in August and the median 5.4 percent estimate in a Bloomberg News survey of 13 economists. Excluding the impact of temporary government subsidies, the underlying rate was 6.4 percent, up from 6.3 percent the previous month.
Hong Kong Chief Executive Donald Tsang said the territory is experiencing "enormous inflationary pressure" from rising wages, and announced a public housing rental waiver to help residents cope with increasing costs. At the same time, the prospect of slower growth in the US and the European debt crisis are hurting the economy by weakening export demand.
Donna Kwok, an economist at HSBC, said: "Inflation is showing no sign of cooling down, as solid wage growth and household spending continue to keep the economy operating close to capacity.
"As business conditions soften in response to persistent global economic uncertainties, inflationary pressures are likely to peak in the coming months."
Tsang last week reiterated the government's August estimate that the pace of increase in consumer prices will accelerate to 5.4 percent this year - the fastest pace since 1997 - from 2.38 percent last year.
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