March CPI picks up 4.6% to more than 2-yr high
Updated: 2011-04-22 07:22
By Li Tao(HK Edition)
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Hong Kong's inflation hit its highest level since August 2008, driven by increases in the cost of food, rent and cigarettes.
The city's overall consumer prices rose 4.6 percent year-on-year in March, compared with 3.7 percent in February, the Census and Statistics Department said on its website on Thursday.
The March reading marked the highest level of inflation seen since August 2008, which also increased 4.6 percent. It also exceeded the 4.2 percent median estimate of 13 economists surveyed by Bloomberg News.
Netting out the effects of the government's one-off relief measures, including electricity subsidies, waivers of property rates and public housing rents, underlying inflation in March rose 4.4 percent, higher than the 3.6 percent seen in the previous month.
Food price and private rent increases were the biggest factors in the city's surging prices, rising 6.3 percent and 4.9 percent last month from a year earlier, according to government figures.
The price of alcoholic drinks and tobacco jumped 21.8 percent from the same period in 2010, after the government in late February imposed another heavy duty on cigarettes of over 40 percent, which has soared to 70 percent of the total price of one cigarette.
Electricity, gas and water rose 7.8 percent while clothing and footwear prices jumped 5.2 percent from the corresponding period last year.
A government spokesman said the city's inflation is likely to stay elevated in the coming months, amid upward price pressure on the external front and robust local economic conditions.
"We expect the underlying pace of CPI inflation to pick up further momentum through the coming months," Donna Kwok, Greater China economist of HSBC wrote in a research report Thursday. "The consumer's power and desire to shop has yet to show meaningful signs of erosion and we expect it will hold strong for as long as labor market conditions stay tight."
Financial Secretary John Tsang in February forecast the city's underlying inflation for 2011 to average 4.5 percent due to the soft US dollar and a possible sustained increase in global food and commodity prices, which will bring more inflationary pressure to Hong Kong.
Irina Fan, senior economist from Hang Seng Bank, told China Daily that as Hong Kong's climbing food price and private rental show no signs of retreat, the bank will probably further lift the city's inflation forecast for 2011 from the current 4.7 percent.
"Surging global food and commodity prices as well as imported inflation will lead Hong Kong's inflation to stay at the upper end throughout the whole year - and which may further hit 6 percent or more in the third quarter of the year," said Fan.
China Daily
(HK Edition 04/22/2011 page2)