ID :
196366
Thu, 07/21/2011 - 17:45
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https://oananews.org//node/196366
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Hong Kong's consumer prices hit 35-month high in June
HONG KONG, July 21 (Yonhap) -- Hong Kong's consumer prices rose 5.6 percent in June from a year earlier, hitting a 35-month high, due to soaring food costs and property prices, government data showed Thursday.
Last month's growth in the consumer price index (CPI) was up from a 5.3 percent gain in May, the Hong Kong government's Census and Statistics Department said.
Food prices and housing rentals led the overall CPI growth, contributing about 70 percent to the CPI growth.
The Hong Kong government expected that the economy will continue to face upward price pressure in the coming months.
"While global food and commodity prices are likely to stay elevated, domestic cost pressures may also increase as a result of the brisk expansion of the local economy since early 2010," the government said in a statement.
Analysts said Hong Kong has other inflation drivers to deal with, including abundant money inflow, largely due to the quantitative easing in the United States.
Donna Kwok, an economist at HSBC, said the simultaneous pick up in both job creation and wage growth has also boosted the domestic demand.
"Hong Kong has entered a cycle in which better job market conditions are encouraging local households and businesses to spend more. As they spend more, overall demand heats up further, keeping businesses hiring and wages rising," she said.
The HSBC economist predicted the inflation in Hong Kong will hit a three-year high next month, before peaking between 5.8 and 6 percent toward the end of the third quarter.
"Until local households and businesses start to rein back spending in response to higher prices, loose monetary conditions will keep aggregate demand and thus inflationary pressures elevated for the rest of this year," Kwok said.
"We expect the CPI to peak around September, but the decline thereafter will be very gradual given the amount of mainland food and property market price momentum left to feed through to final consumer prices."
Last month's growth in the consumer price index (CPI) was up from a 5.3 percent gain in May, the Hong Kong government's Census and Statistics Department said.
Food prices and housing rentals led the overall CPI growth, contributing about 70 percent to the CPI growth.
The Hong Kong government expected that the economy will continue to face upward price pressure in the coming months.
"While global food and commodity prices are likely to stay elevated, domestic cost pressures may also increase as a result of the brisk expansion of the local economy since early 2010," the government said in a statement.
Analysts said Hong Kong has other inflation drivers to deal with, including abundant money inflow, largely due to the quantitative easing in the United States.
Donna Kwok, an economist at HSBC, said the simultaneous pick up in both job creation and wage growth has also boosted the domestic demand.
"Hong Kong has entered a cycle in which better job market conditions are encouraging local households and businesses to spend more. As they spend more, overall demand heats up further, keeping businesses hiring and wages rising," she said.
The HSBC economist predicted the inflation in Hong Kong will hit a three-year high next month, before peaking between 5.8 and 6 percent toward the end of the third quarter.
"Until local households and businesses start to rein back spending in response to higher prices, loose monetary conditions will keep aggregate demand and thus inflationary pressures elevated for the rest of this year," Kwok said.
"We expect the CPI to peak around September, but the decline thereafter will be very gradual given the amount of mainland food and property market price momentum left to feed through to final consumer prices."
