The latest inflation numbers for Hong Kong showing the consumer price index (A) up a minuscule 2 per cent - the lowest rate in 12 years - may serve as evidence of how much stronger Hong Kong's economy is than those of its regional neighbours.
However, inflation is in fact trending down across the region and, with the exception of Indonesia, never went as high as most commentators expected it to when the Asian financial crisis broke in the summer of last year.
Hong Kong does not particularly stand out.
The first chart shows the average inflation rate for Asia, excluding Japan, weighted by gross domestic product for last year. While it indicates inflation is still rising, it suffers from two serious distortions.
The first is that the mainland had a 37 per cent share of regional GDP last year.
The chart, therefore, shows two big inflation peaks - in 1988 and 1994 - that are almost entirely attributable to the enormous swings in price levels experienced in the mainland during the past 10 years.
The second, and more important, distortion is that although Indonesia's 9 per cent share of the weighting is small, its inflation rate of 77 per cent (that's right, 77 per cent, according to the latest figures) would skew any regional aggregate.
