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Lunar New Year lifts HK prices
By Nipa Piboontanasawat |
February 24, 2009, Tuesday
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Print Edition
Print Edition
HONG Kong's inflation accelerated in January as the Lunar New Year holiday prompted extra spending.
Consumer prices rose 3.1 percent from a year earlier, the government said yesterday on its Website, after gaining 2.1 percent in December. That was more than the 2.4 percent median estimate of 12 economists in a Bloomberg News survey.
Inflation has cooled from last year's decade high of 6.3 percent as the global financial crisis and the city's recession hurt confidence and spending. The holiday, which fell on February in 2008, gave a temporary boost to consumption as families bought clothes, furniture and food to celebrate.
"The timing of the Lunar New Year holiday translated into higher consumer demand in January," said David Cohen, an economist at Action Economics in Singapore. "However, this temporary disruption won't change the easing trend of inflation as the economy continues to contract."
Government relief measures, such as waivers of property rates, are also distorting the numbers. Eliminating their effect, inflation slowed to 4.5 percent in January from 4.6 percent in December, the government said in a statement.
Food prices rose 7.2 percent in January from a year earlier after gaining 7.7 percent in December. Private-housing rents increased 8.8 percent after climbing 6 percent. Utility costs slumped 42 percent after falling 37.1 percent.
"Looking ahead, inflation in Hong Kong is expected to come down over the course of 2009 as the impact of the global synchronized downturn continues to play out and weigh on local economic activity," the government said.
Hong Kong is in its first recession since the severe acute respiratory syndrome epidemic in 2003. Gross domestic product shrank a seasonally adjusted 0.5 percent in the third quarter of 2008 from the previous three months.
Consumer prices rose 3.1 percent from a year earlier, the government said yesterday on its Website, after gaining 2.1 percent in December. That was more than the 2.4 percent median estimate of 12 economists in a Bloomberg News survey.
Inflation has cooled from last year's decade high of 6.3 percent as the global financial crisis and the city's recession hurt confidence and spending. The holiday, which fell on February in 2008, gave a temporary boost to consumption as families bought clothes, furniture and food to celebrate.
"The timing of the Lunar New Year holiday translated into higher consumer demand in January," said David Cohen, an economist at Action Economics in Singapore. "However, this temporary disruption won't change the easing trend of inflation as the economy continues to contract."
Government relief measures, such as waivers of property rates, are also distorting the numbers. Eliminating their effect, inflation slowed to 4.5 percent in January from 4.6 percent in December, the government said in a statement.
Food prices rose 7.2 percent in January from a year earlier after gaining 7.7 percent in December. Private-housing rents increased 8.8 percent after climbing 6 percent. Utility costs slumped 42 percent after falling 37.1 percent.
"Looking ahead, inflation in Hong Kong is expected to come down over the course of 2009 as the impact of the global synchronized downturn continues to play out and weigh on local economic activity," the government said.
Hong Kong is in its first recession since the severe acute respiratory syndrome epidemic in 2003. Gross domestic product shrank a seasonally adjusted 0.5 percent in the third quarter of 2008 from the previous three months.
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