INFLATION last month eased to 8.2 per cent, triggering expectations among private-sector economists that the Government will this week cut its official forecast for the year to nine per cent. Government figures released yesterday show consumer price inflation is back on a moderating trend after spikes of 8.5 per cent and 8.6 per cent in May and June, respectively. Bank of East Asia head of economic research Benjamin Chan Sau-san said: ''I expect the Government may well revise downwards its inflation forecast when it releases the second-quarter economic report on Friday. ''In the first seven months of the year CPI(A) was around 8.5 per cent. Although I expect an increase in import prices, especially from Japan, I think nine per cent is still reasonable for the whole year. So I think the Government will revise it down from 9.5 per cent.'' CPI(A), which covers increases in the cost of living for households spending up to $9,999 a month and is the most widely used measure of inflation, rose 8.2 per cent year-on-year in July. Housing costs continued to outpace the index figure, but galloping price rises for foods and fuel were reined in. In the year to July, the cost of food eaten at home increased 5.5 per cent; durable goods rose two per cent; and fuel and light was up 3.6 per cent. Nomura Research Institute economist Daryl Ho Hon-kit said inflation for foodstuffs such as fresh vegetables was volatile, with rises this year see-sawing between 0.8 per cent in April and eight per cent in January. He said: ''If you strip out foods - excluding restaurant meals - you find underlying inflation on CPI(A) is gently moderating after it reached a peak of 10.8 per cent last September. Now in July it is 8.9 per cent, so it is step-by-step moderating.'' The strengthening yen, which will push up the cost of Japanese goods, and inflation in China are expected to push up inflation in the second half, although not to the extent suggested by the Government's year-end forecast of 9.5 per cent. In the first five months of the year, 20 per cent of Hong Kong's imports came from Japan. Hongkong Bank economic adviser Jim Wong Hock-yuen said more than 40 per cent of Hong Kong's retained imports of consumer goods emanate from there. ''Based on the yen's performance since February, the strength of the yen is likely to have an impact on Hong Kong's inflation, although it all depends on whether or not wholesalers and retailers here are prepared to absorb some of the currency effect,'' he said. The growth rate for July in the CPI(B), which covers families spending between $10,000 and $17,499 a month, rose by 8.5 per cent, while the upper level Hang Seng CPI (for the $17,500 to $37,499 monthly budgets) increased 9.2 per cent. Both showed slower growth than June rates, while the composite of all three indices posted a rise of 8.6 per cent.
