Consumer prices up 2.2pc in October
Consumer prices jumped 2.2 per cent last month from a year ago, the most since January, although this was largely due to a low base of comparison created by the government providing rent relief for public housing residents, official data shows.
Economists had expected an increase of 1.8 per cent. Prices rose just 0.5 per cent in September.
Without government relief measures, Hong Kong continued to suffer from mild deflation of 0.3 per cent for the fourth straight month. 'Netting the effects of these one-off measures, the underlying inflation rate remained slightly negative in October as both local and external price pressures were virtually absent,' a government spokesman said.
'The recent rather stable movements of the underlying composite CPI on a seasonally adjusted basis tend to suggest that deflationary pressures should be rather contained going forward,' he said, on the composite consumer price index, which reflects the impact of consumer price change on households.
Many economists expect prices to remain depressed as consumers, facing an uncertain job market, save more and spend less. Last month's unemployment rate improved slightly to 5.2 per cent but the number of people with jobs fell to a two-year low.
The official inflation forecast for this year is 0.5 per cent and 0.9 per cent without government relief measures. For the first 10 months of this year, prices rose 0.4 per cent year on year and jumped 1.2 per cent after excluding the one-off relief measures.
Governments around the world have pumped hundreds of billions of dollars into their economies in the hope of kick-starting a global economy hit hard by the financial meltdown.
The likely result of the unprecedented flood of liquidity is serious inflation once the recession starts to stabilise with growing evidence of ballooning asset prices.
According to the Census and Statistics Department, the end of government subsidies resulted in a 26.7-per cent increase in electricity, gas and water charges last month.
Prices also jumped 22.1 per cent year on year for alcohol and tobacco, 6.1 per cent for housing, 4.7 per cent for clothing and shoes.
The housing component of the consumer price index has a major weighting of 27 per cent and was a big contributor to inflation last month. Prices for durable goods dropped 2.8 per cent, food fell 2.3 per cent and transport eased by 2 per cent.
