December 22, 2011

Consumer prices in Hong Kong expanded further in November but at a slower pace, as a moderation in pork prices helped counterbalance a continued climb in private housing rents and other food costs.

Official data released Tuesday (Dec 20) show that the composite consumer price index (CPI) rose 5.7% on-year in November, slowing slightly from the 5.8% increase in October.

Food costs rose 8.2% in November, compared with an 8.1% expansion in October. Of that, prices of food excluding meals bought away from home climbed 11.5%, similar to the gain in October, as the government attributed the stabilisation to easing pork prices.

The underlying inflation rate for November, which excludes the impact of the government's one-off relief measures, came in at 6.4% on-year, unchanged from the rate in the previous two months.

Food and housing prices have remained the major sources of inflationary pressure in Hong Kong in recent months. While housing prices are likely to continue pushing up consumer prices, food costs have already shown signs of stabilising.

Higher housing costs are likely to be offset by easing food costs as imported food cost pressures from China have been moderating, lifting some weight on Hong Kong's inflation in months ahead.

In addition, a retreat in global commodity prices and a gloomier global economic outlook will also help ease inflationary pressures in the short term.